Twiggy Forrest says BHP designed mining tax

Despite changes to the mining tax recommended by Don Argus, Fortescue Metals chief executive Andrew ‘Twiggy’ Forrest says the tax remains unfair and is “designed” by BHP.

Speaking to media at the Credit Suisse Asian Investment Conference in Hong Kong today, Forrest said the changes to the mining tax did not solve the problems.

“My view of this is it was bought into existence to solve the RSPT (resources super profits tax),” he said.

Today the federal government agreed to 98 recommendations by the Minerals Resources Rent Tax (MRRT) policy transition group, 94 of which relate to Australia’s new resource taxation agreements and four to promoting exploration.

Draft legislation to be issued for consultation will be effected by the changes and Forrestm who yesterday was named Australia’s richest businessman, said it was laughable that BHP played such a major role in the changes.

“It was a tax designed by BHP. It’s amusing the ex-BHP chairman (Don Argus) chaired the independent committee made up of large companies.

 “It’s a precedent that should not be supported. Policy should be broad ranging, it should be fair and it should be based on the constitution of being equal among states and equal among companies.
"That hasn’t happened here. BHP has literally written a tax for everyone else to pay.

“If you attend briefings by BHP, Rio and Xstrata they are not talking about paying a great deal of this MRRT (minerals resources rent tax). They have massive double protection from it which is not available to new companies.

“Who else is going to pay it? It will be the new companies, the new developers who are the future of the economy that you want to encourage. It is unhealthy and unprecedented and should not be supported.”

Fortescue’s chief financial officer Stephen Pearce said the ongoing uncertainty around the tax meant the iron ore miner could not yet determine how much the MRRT would cost the company each year.

The government agreed all current and future state royalty payments by iron ore and coal mining companies should be credited against federal taxes, despite previously saying only current royalties would be credited.

The mining industry spent $21 million to stop the mining tax, and the rules on future and current royalty payments was one of the key issues debated between the industry and government.

“We agree with the Policy Transition Group that the Mineral Resources Rent Tax is a more efficient way to provide Australians with a return on their mineral wealth and that we shouldn’t give a green light to the states to increase their royalties," Treasurer Wayne Swan and Resources and Energy Minister Martin Ferguson said in a joint statement.

In the statement, they both said they were “pleased to accept all 98 recommendations relating to Australia’s new resource arrangements, which will inform the design of the draft legislation to be released for consultation in the first half of this year.”

“The Government recognises the importance of delivering a fair return to the regions that generate so much of our nation’s wealth.”

Further to the latest alterations to the mining tax, the government has also taken on a recommendation to establish a Resource Tax Implementation Group, made up of industry representatives, tax experts and government officials.

 

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