Time For Dialogue on Mining Tax
By John Miller, Editor
Now that Australia has a formal government at national level with Julia Gillard returned as Prime Minister with the help of support from the Greens and two ‘independents’, it is time for serious dialogue about tax reforms as they relate to the mining industry.
It is pretty safe to say that had the original Resources Super Profits Tax not been altered, the Labor Government would have suffered a humiliating loss, but even with the new Mineral Resource Rent Tax (MMRT), the government felt the backlash from a powerful mining industry and just scraped in.
Now that the election dust has settled the mining industry is calling for dialogue around tax reform and this must happen quickly to ensure the industry remains vibrant and effective.
These tax proposals have created a massive cloud over Australia’s mining industry with the resulting uncertainty denting confidence in the market and putting up a big sign to the rest of the world that Australia’s doors are closing for business.
The industry is urging the Prime Minister and government to look at the Henry tax reforms again and ensure that any benefits from a mineral resources tax are used wisely.
These calls have come amidst growing concern about the influence that the Greens will have on the government. The Greens have stated that they support a nationwide uranium mining ban and an increase in the rate of the MRRT, both of which would have dire consequences for the industry.
The Association of Mining and Exploration Companies (AMEC) has welcomed a proposal to establish a tax summit with all Henry Tax Review recommendations on the table for open, transparent and constructive discussion. This must happen as soon as possible.
AMEC chief executive Simon Bennison says, “This provides a perfect opportunity to immediately withdraw the extra tax on mining and develop a long term strategic tax reform program.”
Adding strength to this position is the statement by the independents that the incoming government cannot claim a mandate on any policy position.
Simon Bennison has told the media that changes to the tax are inevitable and that treasury still has to come up with the goods on what will underpin the estimated $10.5 billion in expected revenue.
Mining industry groups say it is vital that Ms Gillard and her government implement initiatives aimed at restoring confidence in the market and declaring Australia once again open for business.