PERTH – Australia’s proposed minerals resources rent tax (MRRT) would be worse for mining jobs and investment than its super profits tax (SPT) predecessor, a Parliamentary senate select committee on fuel and energy has said.
The committee, made up of senators from all political parties, said in a report on Friday that the new mining tax should be scrapped “immediately”.
The committee found that the development process behind the proposed MRRT was “even worse” than the one applied to the SPT.
“Hundreds of mining companies directly impacted by this new tax has been excluded from the discussions in the lead-up to its announcement. State and territory governments were again excluded from any discussions, even though changes to the royalty arrangements under the new tax are directly relevant to them.”
The proposed MRRT also gave “unfair competitive advantage” to the three companies – BHP Billiton, Rio Tinto and Xstrata – involved in the preliminary negotiations.
“The government negotiating exclusively with those three companies did not act in the public interest, and it should have. The interest of large multi-commodity, multi-project and multi-national mining companies are often different from the interest of smaller and mid-tier mining companies.”
“In its haste to reach a new deal quickly, the government gave BHP Billiton, Rio Tinto and Xstrata a clear competitive advantage,” the report found.
Adding to the frustration of the small and mid-tier miners, the government has subsequently “refused” to have meaningful discussions with these miners on the effects of the proposed tax.
The committee expressed its concern around the government’s refusal to release basic information on the design and implications of the new MRRT.
“We still do not know what the commodity prices, production volume, exchange rate and other assumptions are. This is very basic information which should be publicly available.”
The report further stated that there was also no indication of how much revenue would be received from iron-ore profits, and how much from coal profits.
“The government is treating all of this information sought by the committee as if it relates to state secrets. The committee is concerned that the true impact of this new tax on the budget, the economy, jobs, on investment in the mining industry and on states cannot be properly assessed without it.”
It was also unclear why the government was refusing to provide this information, the committee said.
“The committee considers that, in refusing to provide the information requested, and in refusing to explain why it is supposedly not in the public interest to do so, the government may be in contempt of the Senate.
“If an election had not been called, the committee would have put a motion forward in the Senate to pursue this matter.”
The committee’s report was released just days after junior and mid-cap miners resumed their anti-tax mining campaign.
Led by the Association of Mining and Exploration, industry bodies including the Retail Federation and the Chamber of Commerce would run parallel advertising campaigns to raise awareness around the implications of the proposed MRRT.
Meanwhile, Prime Minister Julia Gillard has directed her campaign trail to Perth, in order to win support for the upcoming elections, scheduled for August 21.
Source: miningweekly