Changes considered to mining tax

The Government has stepped back on its push to implement the proposed Resources Super Profits Tax.

Deputy Prime Minister Julia Gillard has said while the Government is committed to implementing the mining tax, it is open to changes.

The mining industry has seen protests across the sector in regards to the mining tax, with Atlas Iron managing director David Flanagan telling Australian Mining “this tax is bad for the mining sector and bad for the country.”

Independent minister Nick Xenephon believes the Government is carrying out compromise talks with the mining industry to minimise the current backlash it is seeing.

“I suspect the mining industry and the Government are frantically trying to thrash something out behind closed doors,” Xenephon told ABC Television today.

“I don’t think the federal government relishes the thought of the mining industry providing a multi-million dollar war chest against them,” he added.

A major point of contention between miners and the Federal Government is whether state royalty rates will be abolished, or whether the industry will be hit twice under the Resources Super Profit Tax and the royalty regime.

This follows on the back of West Australia increasing the current royalty rates for miners in the State.

The mining industry has responded to these tax increases by announcing the review and potential shelving of expansion projects and new development in Australia.

To date Fortescue Metals, Rio Tinto, BHP Billiton and Xstrata have all stated they are carrying out a critical review of existing projects.

However, Mineral Resources Development minister Paul Holloway believes that the mining industry will not carry out this threat, stating that an initial environmental impact statement had been released by BHP in regards to its Olympic Dam expansion.

The Federal Government recently called for talks with the quarry industry after including high volume low cost products such as lime, gravel, sand, cement and phosphates under the new tax scheme.

The addition of the quarry industry drew criticisms that it may drive up construction and farming costs due to the increased taxes of critical material.

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