Until now the strongest protests and only significant voice raised against the Australian Federal Government’s proposed Mineral Resource Rent Tax (MMRT) has come from the mining industry itself and primarily from the iron ore and coal sectors which will be directly affected.
However, the tax is likely to impact on all Australians with as it will not only hamper the growth of emerging iron ore and coal miners, but it will drive investment capital offshore and will throw a dark shadow over Australia’s sovereign risk reputation, at a time that Australia can least afford to take that chance with increasing economic gloom in Europe and the US.
The rest of the mining world is watching developments in Australia closely with other resource-rich nations rubbing their hands at the prospect of Australia’s dominance in the supply of iron ore and coal being eroded.
Now all Australians have the chance to have their say and increase pressure on the government to scrap the tax, or at the very least delay it until it can be subjected to a more coherent planning and review process. A new lobby group, Eureka 2011, has started the ‘Stop the Mining Tax’ campaign in order to bring a grass roots voice to the arguments against the MRRT now being put forward by mining industry groups.
The group’s chairman Peter Ellery says, “It’s very easy for the Government to dismiss the arguments of the mining industry itself as being rooted in self interest. However, many Australians with no direct connection to mining believe this is the worst possible time to be putting a brake on the performance of the main driver of our economy, and it’s those people whose views we will be putting to Government.”
Peter Ellery says the campaign will convey to the Government widespread public misgivings about the secretive way in which the proposed tax was hatched, and the fact that it appeared to be an opportunistic money grab rather than a part of the promised comprehensive review of the Australian taxation system.
“It’s a bad tax, cobbled together in haste and secrecy, which will be damaging to the mining sector, very difficult to administer and unlikely to meet Treasury’s optimistic revenue predictions. Our international competitors for the supply of iron ore to China are on the record as saying they will cut prices to erode Australia’s market share, yet here’s our own government proposing a new tax that will further weaken our competitive position.
“The Gillard government’s approach to this tax flies in the face of economic logic.”
Peter Ellery says the manner of the development of the proposed MRRT should also give Australians cause for concern. “Within the last few weeks ministers have referred to the consultative process that is supposedly taking place between Government and the mining sector. It is universally accepted that there has been no consultation whatsoever, unless you accept that three multinational companies – BHP, Rio Tinto and Xstrata – are truly representative of Australia’s mining industry.
“There are literally hundreds of Australian-owned mining companies who would claim references to ‘consultation’ are, at best, at variance with reality,” he says.
The directors of Eureka 2011 are business communicators Peter Ellery, Jim Ward and Michael Baker. For information on the directors and the campaign, please visit stoptheminingtax.com.au