Tax negotiations fail

Mining executives left Canberra no closer to a middle ground on mining taxes after consultation with the Federal Government this week.

After meetings with Federal Treasurer Wayne Swan and Minister for Resources Martin Ferguson, BHP Billiton, Rio Tinto and Xstrata have stated that the Government has not addressed their main concerns over the proposed resources tax.

Despite Prime Minister Kevin Rudd’s insistence on having closer negotiations with the mining industry, he did not attend the talks.

Coming together in a joint meeting, rather than individually as the Government requested, The Big Three miners declared their outrage at the decision to enforce the Resources Super Profit Tax retrospectively, rejecting the 40% tax rate as to high to remain internationally competitive, as well as the stability of the arrangements of taxes and royalties for new and existing projects.

However, while the Government has shifted over its stance on the tax rate for the quarrying industry and potentially for the coal seam gas sector, it reiterated the 40% tax rate on all profits over 6% for minerals as justified.

According to The Australian, Rudd took the opportunity yesterday to indicate that the government is no longer prepared to discuss the implications of the super tax with the miners, describing sections of the minerals industry as "ugly".

 

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