Abbott Promises Mining Tax Credits

by Mary Swire, Tax-News.com, Hong Kong

17 August 2010

Tony Abbott, the leader of Australia’s coalition opposition, has promised that, not only would a coalition government not introduce the government’s proposed mining tax, but also that it would provide additional tax incentives for mining exploration companies.

As, it was said, the future of the mining sector is dependent on the ability to make new mineral discoveries, the coalition would implement an AUD150m (USD135m) exploration development programme, commencing in 2011-12.

This will be delivered through tax credits to Australian resident shareholders for eligible ‘greenfield’ exploration expenditure incurred in Australia. A ‘no taxable income’ test will ensure that the programme is only available to junior minerals explorers. Final implementation details will be determined in consultation with the mining industry’s representative bodies.

In addition, as part of its environmental policies, the coalition would also spend more than AUD158m towards clean coal technologies, including carbon geo-sequestration projects associated with coal-fired electricity generation, and AUD45m towards the development and implementation of soil carbon technologies that aim to capture and sequester carbon in soils.

Amongst other minor measures, the coalition would also invest another AUD45m to accelerate the development of carbon capture through biological sequestration technologies, such as algae, and work constructively with industry to monitor and upgrade an appropriate maritime surveillance regime to protect Australia’s offshore oil and gas platforms.

The coalition will commit a total of almost AUD420m, aimed at “ensuring the viability and competitiveness of Australia’s resources and energy sector to grow investment, jobs and exports”.

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