Mining tax proposal may be blocked
Wednesday May 12, 2010
The Federal Government’s proposed new 40 per cent tax on the earnings of mining companies has hit a great deal of opposition.
The proposal, which has the potential to affect Cobar’s three major mining operations plus numerous local exploration activities, would be introduced to pay for increased employer superannuation contributions from 2012.
While the new tax is still in proposal form, many industry and political groups have already declared their opposition to it.
The Federal Opposition has officially declared it will not support the new tax.
The Minerals Council of Australia, the country’s peak representative body of the mining industry, said it was disappointed at the lack of consultation before the tax was announced.
“We will work with the Government to get the design and rate of a resource rent tax right,” the Minerals Council’s chief executive officer Mitch Hooke said last week.
“The Commonwealth appears to have inadequately accounted for the stifling effects of this new tax on the mining industry.
“It is an unprecedented double tax that will hit the industry’s workforce, the millions of Australians with shares in superannuation or minerals companies and the thousands of small businesses that service the industry.”
He said if the tax is introduced, Australia will have the highest taxed mining industry in the world.
State member for Barwon Kevin Humphries also weighed in on the debate last week, saying the tax has the potential to devastate towns such as Cobar in his electorate.
“Mining contributes to employment growth and has been a great boon to regional areas.
“Just in Barwon alone mining communities such as Cobar and more recently Nyngan, remain reliant on the mining industry.
“A 40 per cent tax on profit is not a balanced position; already junior miners and exploration companies have shelved projects that could return wealth to our communities.
“Why would you make a 40 per cent ambit claim or wealth tax on the one industry that has helped this country through a tough global financial situation?,” Mr Humphries said.
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