Mining Tax Negotiations In Australia Finally End

Mary Swire, Tax-News.com, Hong Kong

22 November 2010

The Australian government has concluded four months of consultation with mining companies on the planned mineral resource rent tax (MRRT).

The Policy Transition Group’s co-chairs, Resources and Energy Minister, Martin Ferguson, and former BHP Billiton chairman, Don Argus, said that the consultation sessions had been “very constructive”. Draft legislation will be introduced next year and the new tax will begin in July 2012.

Submissions from companies involved in the consultation process, now published, revealed strong feelings and dismay about the proposals. One of the most vociferous critics had been Geoff Plummer, chief executive of OneSteel, who said that the tax would “have a significant adverse impact on both its iron ore export business and the steelworks”. He also said that there was “potential for OneSteel to be triple taxed, adversely affecting its ability to reinvest in the business, thereby further affecting the prosperity of Whyalla, and South Australia”.

Ken Henry, Australia’s Treasury Secretary and the tax’s original architect, testifying to a Senate hearing on Monday (November 22) said that the Australian economy could be undergoing a permanent structural change as a result of the mining boom. He said that the plan had not halted companies undertaking record levels of investment amid a trade shock that appears likely to be sustained.

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