Monday, June 28, 2010

It's Mining Week, all over again

The Gillard government is just days away from unveiling a reworked version of resource super profits tax.

The redesigned tax will cut the impost that would have faced coal seam gas and also liquid natural gas produced from the previously exempt North West Shelf.

Low-profit industries such as sand and gravel will remain outside the super profits net, paying royalties as at present.

The changes will boost the level at which the new tax cuts in and modify the plan to carry the industry's losses, both of which are expected to be attractive to the the big miners.

It is unclear whether the government will cut the 40 per cent rate.

Pressed yesterday to confirm Mr Rudd’s position that the 40 per cent rate was a central element to the tax, the Prime Minister deliberately left open the issue.

“Each and every decision I’ll take as we genuinely negotiate, will be driven by what is in the best interests of the nation,” she told the Nine Network.

“I’m throwing open the door of the government, if they can open their minds and I think we are well on our way to seeing an opening of the minds, and a respectful genuine negotiation.”

The package to go to Cabinet today is not final in the sense that it will leave details still to be negotiated with the mining companies, perhaps over a period of months.

The companies themselves have heard nothing new from the government, with one of the big miners saying it is yet to be invited to a meeting.

The reworked tax is likely to be unveiled later this week after Treasurer and Deputy Prime Minister Wayne Swan returns on Wednesday from the G20 heads of government meeting in Canada.

It will be sold as raising as much revenue as intended making use of higher forecast commodity prices for petroleum, iron ore and coal.

On ABC radio's Sunday Profile Resources Minister Martin Ferguson would not say whether the change would be a "tinkering with" or a "wholesale rewriting" of the super profits tax, but did say the tax would remain "profits-based".

Published in today's Age

Photo: Wiki Visual

Related Posts

. What's the government's offer?

. No way back, no way out - the miners don't want a deal

. Mining is unprofitable, in an important sense