Now that the Australian Federal Government’s Policy Transition Group (PTG) has finalized face-to-face discussions with the mining industry about implementation arrangements for the proposed new mining tax, it is important that the industry’s concerns are addressed by the nation’s power brokers.
The PTG has held consultation sessions in Melbourne, Perth, Brisbane, Adelaide and Sydney in recent weeks and has received a large number of written submissions on the technical design issues associated with implementation of the Minerals Resource Rent Tax (MRRT) and the extended Petroleum Resource Rent Tax.
With the information gathered, the PTG is now considering the submissions and consultations before providing a final report to the Federal Treasurer by the end of the year.
There is no doubt that these discussions and consultations with the whole industry should have occurred much earlier in the peace, before the Resources Super Profits Tax (RSPT) and the subsequent MRRT were placed into the public arena.
The process has been flawed since day one and has created a lot of confusion, apprehension and anxiety in the industry that plays a major role in driving Australia’s economic growth.
Tax is a complex issue at the best of times and the MRRT is no exception but the Federal Government has made the new tax a lot more difficult by its lack of information and little or no consultation.
Then when it did consult after the RSPT fiasco, it only did so with the super majors, BHP Billiton, Rio Tinto and Xstrata, leaving everyone else in the dark. The election backlash against the government brought about the latest round of consultation and the entire industry is hoping that this time they will listen.
Maximus Resources’ chairman Robert Kennedy reflected the concerns of the juniors during his address at the company’s recent annual general meeting when he stated that small mining companies have been affected by the uncertainty caused by the proposed RSPT and the subsequent MRRT. He also stated that the uncertainty has been exacerbated by the recent OECD call for the government to widen the net to all minerals.
His solution is worthy of inclusion in the debate and support from the industry – “I believe that the fairest and most cost effective way of raising extra taxes is across the board by a change to the company tax rate being higher for those companies making so-called ‘super profits’ and lower for the rest of the corporate world.”