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The Minerals Council of Australia has given qualified approval to the mining tax and says it is in line with an agreement Julia Gillard struck between resources giants last year.
Whilst unhappy about the complexity of the legislation and its short consultation period, the MCA endorsement represents an important approval for the Government.
In its submission to the mining tax parliamentary inquiry, the MCA approved the tax and also hosed down recent arguments it would be unfair to smaller miners.
Junior miners, lead primarily by Fortescue Metals Group, have argued the tax unfairly favours big companies, and a recent study by BDO Accounting suggested Rio Tinto would not pay MRRT.
But the MCA said the legislation had been designed to lower the burden of the tax on juniors.
“Since the announcement of the MRRT, some misconceptions have developed, especially regarding its application to smaller, emerging miners,” it said.
The MCA said although it had cautiously issued its approval, given the lack of consultation the Government should commit to fixing any “design flaws and unintended consequences” that might occur after the tax’s introduction.
The tax has already been introduced to parliament, and is due to be voted on next week.
Whilst gaining the support of the Greens, the Government is yet to secure all the votes necessary to pass the legislation.
Tasmanian independent Andrew Wilkie has taken on the arguments of the junior miners, and NSW independent Tony Windsor is also yet to be convinced.
Earlier this month Windsor said he would only back the tax if $200 to $400 million of its takings were spent on coal seam gas studies.
The Government has previously said while it is willing to negotiate with the independents it is also unwilling to deviate from its own budgeting.