Government holding firm on mining super tax proposal

Rudd spent last week in Western Australia and Queensland talking to the mining industry about the proposed tax changes. It was reported that he was close to an agreement on transitional arrangements. The Sydney Morning Herald said the Prime Minister could announce the arrangements as early as this week which would reportedly, “go part of the way to addressing concerns about the application of the tax to existing projects and take some of the sting out of the miners' campaign”.
The transitional arrangements would do little to appease the concerns of big miners such as BHP Billiton and Rio Tinto, according to the media report.
BHP Billiton chairman Jac Nasser recently sent another letter to shareholders voicing concerns over the proposed RSPT. He also criticised the Government’s approach to the issue saying, “…we are very disappointed that consultation has not been possible. For reasons we do not understand the Government chose not to undertake consultation on the nature and design of the proposed super tax prior to its announcement.”
The Federal Government secretariat charged with listening to the concerns of the mining industry to the proposed tax has also been criticised for being “too wedded” to the tax, and not adequately empowered to discuss its most problematic features.
The claim of inadequacy was levelled by South Australia’s peak mining lobby, the South Australian Chamber of Mines and Energy (SACOME).
The single day of hearings in Adelaide last Friday by the Secretariat of the Federal Government’s Resource Tax Consultation Panel (RTCP) was SACOME said, “frustrating for members of the South Australian resource industry who wanted to voice their concerns on the structure of the reforms.”
“The so called consultation appeared to be little more than an attempt by Treasury representatives to sell the tax to our industry rather than to try and understand our concerns,” SACOME’s chief executive, Jason Kuchel, said.
“Of critical concern is the fact the Secretariat showed a lack of understanding of the cyclical nature of the mining industry.
“Members appeared very much stuck on the theory of their taxation ideals and do not sufficiently grasp the realities of the mining world and the national economic impacts of this proposed impost,” he said.
“Their main focus was little more than a sales pitch and was restricted to the implementation of the tax.”
This is a sentiment also echoed by BHP Billiton which noted that there had been no acknowledgement by the Government of the “major flaws of the proposed tax and the significant impact on the industry”.