PERTH – The planned mineral resources rent tax (MRRT), which Australia’s newly formed government plans to introduce in 2012, would face an A$8-billion shortfall, local media reported on Tuesday, quoting an unreleased report by global resource intelligence firm Intierra.
The confidential report has reportedly confirmed that the tax would only raise some A$2,5-billion in its first two years, as opposed to the planned A$10,5-billion punted by the Labor party.
The MRRT, which replaced the super profits tax, was aiming to impose a 30% on the resource profits of coal and iron-ore companies.
The latest report echoes one from a Parliamentary senate select committee on fuel and energy, which also questioned how the federal government calculated returns from the MRRT.
The committee expressed its concern about 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 committee said in July, before the federal elections.
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 Australian newspaper reported on Tuesday that the Intierra report estimated that less than 50 companies would pay the MRRT.
Sources in the mining industry familiar with the report told the daily that the Intierra report was based on estimates of commodity prices, mine costs, the value of the Australian dollar and other factors that would affect the tax bills of mining companies.
The Intierra report highlighted concerns among mine companies that a Labor-Greens government would be forced to raise the tax or expand it beyond iron and coal to raise A$10,5-billion.
Coalition finance spokesperson Andrew Robb told ABC Radio that the latest mining tax report confirmed what many have been saying for weeks, that there was “no way” the government would get A$10-billion from this mining tax.
“There's an A$8-billion gaping hole in the government's mining tax and in its budget and this will cause, you know, major problems again with more borrowings, more reckless spending and a Julia Gillard government, if it is returned today will mean more incompetence and more debt for Australians to meet.”
Meanwhile, a spokesperson for Wayne Swan has told media that the government stood by its forecasts, which had been confirmed by Treasury.
Gillard was on Tuesday handed guardianship of Australia, after two independent members of parliament – Tony Windsor and Rob Oakeshott –backed the Labor party. This, along with the backing from the Greens party, ensured Labor a minority win.
The federal government has been in caretaker mode since an election on August 21 delivered inconclusive results.
Source:miningweekly