PERTH (miningweekly.com) − The Australian government’s proposed mineral resources rent tax (MRRT) received a boost on Monday, as Independents Andrew Wilkie, Tony Windsor and Rob Oakeshott, announced that they would support the tax.
Wilkie pushed the federal government to agree to amendments to the tax, lifting the threshold from A$50-million to A$75-million, and the phasing in of the tax from A$75-million to A$125-million.
“I understand that this will reduce the number of resource companies paying the full rate of the tax to between 20 and 30, and will cost about A$100-million over the forward estimates,” he said.
Windsor previously refused to endorse the MRRT unless there was a change to how water was managed in the coal seam gas (CSG) industry. However, he said on Monday that the Labor Party had met his demands, and that A$200-million were being set aside for bioregional assessments on the impacts of CSG extraction.
“Bioregional assessments will now take place in priority areas and will be funded by the Commonwealth with oversight by an independent expert scientific committee,” Windsor said.
The Australian Association of Mining & Exploration Companies (Amec) on Monday said that it was disappointed that the independents decided to back the tax.
“Nevertheless, we welcome Wilkie’s observation that the design of the MRRT legislation favours big miners over smaller companies, and that he has negotiated a deal with the government to amend the Bill to raise the MRRT profit threshold to A$75-million with the tax phased in to A$125-million,” said Amec CEO Simon Bennison.
“Unfortunately, this amendment does not go far enough. We consider there is more room to move to provide small and emerging miners with a higher tax shield comparative to that provided to the larger mature companies.”
Bennison noted that Amec members were looking for a fair and equitable tax across all Australian mining companies. “The current design of the MRRT does not achieve that.”
The Australian Greens leader Bob Brown said that raising the threshold at which the tax would kick in would undermine the “already meagre” revenue stream.
“The Greens want a fairer mining tax, a genuine super profits tax. If there is to be any change to the mining it should be, at the very least, revenue neutral,” he commented.
Earlier on Monday, Australian opposition party leader Tony Abbott again called for the scrapping of the proposed MRRT, as it appeared before Parliament for debate.
“I can’t make myself any clearer. For almost two years I have been saying that this is a bad tax: bad for investment, bad for jobs, bad for the industry upon which Australia’s prosperity depends. Now, we will look at any amendments that appear in the Parliament, but we will be opposing the mining tax including any amended mining tax,” Abbott said.
Treasurer Wayne Swan said that he was “at a loss” to understand why the federal opposition party was against the mining tax, stating that Abbott was “seeking to wreck a vital reform for Australia that helps us deal with the challenges of the mining boom and makes sure that many people in our patchwork economy get the benefit of the boom”.
“What I can guarantee is I'm going to do everything I can to get this through the Parliament. This is a very important measure. It's one that I've been committed to for a long time and we're putting it in place because it's what our national interest demands,” said Swan.
He noted that Australia had hugely profitable mining companies, as well as terms of trade at 140 year highs, which could now be distributed around the country to make sure that all Australians benefitted from the resources boom.
The Labor government was aiming to have the package passed by the lower house by the end of the year.
During November, the Australian Parliament referred the MRRT and the Petroleum Resources Rent Tax Bill to a Senate Economic Committee, which would investigate the impacts of the tax.