Miners not prepared for tax

A recent survey has shown more than 60% of miners have not made any preparations for the upcoming mining tax.

 A recent survey has shown more than 60% of miners have not made any preparations for the upcoming mining tax.

The Reuters survey of 200 tax managers from mining companies discovered that while the majority expected the tax to be enacted most were still ‘struggling to fully comprehend its impact, according to The West.

The respondents included top tier and second tier miners.

Of these, nearly 70% said they will wait until the tax has passed before taking action, while less than half had even carried out board discussions on its implications.

Close to 70% of those surveyed said they are unlikely to meet their first installment on time, while nearly half complained that there is a lack of public information on the tax.

Nearly all those surveyed said compliance costs will be the largest issue.

While miners have expressed dismay over the tax, a significant shareholder in two of the global giants – BHP and Rio Tinto – has backed the government’s move.

Fidelity Worldwide Investment stated that while the mining and carbon tax have created uncertainty, the intent of the Mineral Resources Rent Tax is right, the Sydney Morning Herald reports.

"The intent of the mining tax or any excess share taken from the mining industry was right from a directional perspective in that you take money from a sector that is doing very well and invest into technology, R&D, increasing innovation," Fidelity global equities fund manager Amit Lodha said.

Earlier this week, Federal treasurer Wayne Swan lashed out at miners who had lead "ferocious and highly misleading" campaigns against the Government’s taxes.

"I fear Australia’s extraordinary success has never been in more jeopardy than right now because of the rising power of vested interests," Swan wrote.

"This poison has infected our politics and is seeping into our economy."

"Though these vested interests have not yet prevailed, every day their demands get louder."

Swan labeled mining interests the "0.1 per cent" and said most other companies had worked with the Government on its policies.

"For every Andrew Forrest who wails about high company taxes and then admits to not paying any, there are a hundred Australian business people who held on to their employees and worked with government … during the GFC," he said.

Fortescue Metals Group came quickly to Forrest’s defence following the attack, with FMG deputy chair Herb Elliot saying Swan’s criticism was "irrational".

"At Fortescue, we stand proudly with Andrew Forrest and his record of achievement in business and his commitment to lift those most in need," he said.

Elliot said Forrest had started from nothing to build an important mining company.

"Andrew epitomizes the spirit of what an Australian can do if given a ‘fair go’," he said.

But Swan said a "handful of vested interests" had become too powerful from Australia’s economic success and were using their power to "satisfy their own self-interest".

"The infamous billionaires’ protest against the mining tax would have been laughed out of town in the Australia I grew up in, and yet it received a wide and favourable reception two years ago," he wrote.

The tax is likely to be enacted on 1 July.