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BDO Accounting has hit back at Treasurer Wayne Swan’s criticism of its mining tax study, and says its claim the tax is unfair still holds true.
Despite the tax being introduced to Parliament earlier this month junior miners, lead primarily by FMG, are still arguing the MRRT unfairly favours large miners.
FMG chairman Andrew Forrest last week used a study by BDO to claim the tax was unjust, but yesterday Treasurer Wayne Swan rubbished the study and Forrest’s accusations.
In a scathing letter to BDO Swan said the study contained substantial errors, distorted public debate, and made “simple mathematical error”.
Treasury also said the study had little credibility and was based on “unrealistic assumptions”.
In a response to Swan BDO director Sherif Andrawes said BDO had updated its study addressing most of Swan’s concerns.
BDO said based on the information that was available to the public, it still appears its claim that Rio Tinto would not be liable for the MRRT was correct.
In his letter Andrawes reiterated BDO’s recommendation that safeguards be set up in the mining tax to protect smaller companies.
He said the Government should model the effects of its recommendations before they were “dismissed out of hand”.
“If our modelling is incorrect and these safeguards have no impact then we would assume that Treasury’s modelling would show this to be the case,” he said.
“If our modelling is incorrect, the inclusion of these safeguards would also have little to no impact on the MRRT revenue raised by the Commonwealth, but would provide an important safety net for smaller miners.”
FMG executive Julian Tapp yesterday criticised the Government for not releasing its own mining tax modelling.
The Government is refusing to publish its own study because it says the information was provided to it by BHP, Rio Tinto, and Xstrata in confidence.
Andrawes said given Swan’s letter to BDO had been published on the Treasury website, the Government should also publish BDO’s reply.