Australian Mining Industry's Profits Based Resources Tax

Representatives from the Western Australian mining industry have weighed into the debate on the federal government’s proposed resource super profits tax, claiming it will have a significant impact on all Australians, not just mining companies. Fortescue Metals Group Ltd founder and chief executive Andrew Forrest said the federal government had misled the Australian people, and the new tax was just a nationalization of 40 per cent of the mining industry, and it should be scrapped.

The Government, in response to the tax review, wants to slug mining companies with a 40 per cent tax. Mr Swan (Treasury Minister of Australia) said “the Federal Government was replacing an inefficient royalty regime which penalized mines, miners and shareholders, the regime we are talking about putting in place is a profits-based tax and of course when companies are much more profitable the return to the Australian people is higher. But when profits are lower this is a tax which encourages many of those mines that have been punished and penalised by an archaic and unfair royalty’s regime.”

Mining industry bosses, including Fortescue Metals Group chief Andrew Forrest have banded together to oppose the tax, saying it will not only harm mining but will harm Australian families. Mr Forrest said today all Australian mining projects which required substantial capital, including Fortescue, would be under review. Queensland based mining magnate Clive Palmer has also been openly critical of the tax.

The council was quick to label the resources tax a revenue grab rather than taxation reform. Never forget to the council itself that made a submission to the independent tax inquiry suggesting the resources tax be replaced with a profits-based tax.

In small businesses, retail and non-residential building continue to struggle, stating that some resources are picking up faster while the other sections are at a slow pace.