Tue, Dec 21, 2010 - Page 10 News List

Australia to release mining tax report as companies take aim

Bloomberg

A report on Australia’s planned 30 percent tax on iron ore and coal profits will be released this week as a mining group threatened to restart an anti--government advertising campaign over state royalties.

The report from a committee chaired by former BHP Billiton Ltd chairman Don Argus will be made public before Dec. 25, Australian Treasurer Wayne Swan said yesteray.

The committee was set up to consult with the industry over the design and implementation of the tax following an accord in July.

“The report will be released before Christmas,” Swan told reporters in Canberra. “We will work cooperatively with the industry and the states to resolve the issues.”

Mining companies are in dispute with the government about how the royalties will be dealt with under the tax, forecast to raise A$7.4 billion (US$7.3 billion) in its first two years from 2012.

The Australian Mining and Exploration Companies will restart an advertising campaign if there is no credit for future state royalties, CEO Simon Bennison said.

“We are considering our position and we might restart advertising, depending on how future royalties are treated,” Bennison said by telephone from Perth yesterday.

Following pressure from mining companies, Australian Prime Minister Julia Gillard in July watered down the tax to a 30 percent levy on iron ore and coal profits from former Australian prime minister Kevin Rudd’s 40 percent tax on all resources. Gillard, Swan and Australian Resources Minister Martin Ferguson signed a tax agreement on July 2 with BHP, Rio Tinto Group and Xstrata Plc.

The proceeds from the tax will pay to reduce the corporate tax rate for all Australian businesses to 29 percent from 30 percent, provide A$6 billion in spending for roads, rail and ports, and increase the amount paid to people’s retirement savings to 12 percent of their salary by 2020 from the current 9 percent.

The tax creates “a stream of revenue to boost savings, invest in infrastructure and lower tax for business, also to build our national savings,” Swan said.

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