13/05/2010 - 12:20

Premier digs in on super profits tax

13/05/2010 - 12:20

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Around a quarter of planned resource projects in Western Australia will be canned if the federal government pushes ahead with its 40 per cent super profit tax, Premier Colin Barnett says.

Premier digs in on super profits tax

Around a quarter of planned resource projects in Western Australia will be canned if the federal government pushes ahead with its 40 per cent super profit tax, Premier Colin Barnett says.

The new so-called resource super profits tax is an inefficient way for the federal government to raise money that will be a huge impost on Western Australia's mining industry, Mr Barnett told a press conference in Perth today.

He said the 40 per cent tax on resource profits, which is proposed to come into effect from July 12, would drive investment out of the state and Australia.

"International investors, international mining companies, they don't have a soft spot in their hearts for Australia, they will simply invest wherever the minerals or petroleum are and where their return is most secure," Mr Barnett said.

"There's not going to be any sentimentality about this.

"Beyond that, this is an attempt by the Commonwealth government to control all of the mining and petroleum industry in Australia.

"They want to run it out of Canberra, that's what this really about. For a government that can't put pink batts in the ceiling, how can they possibly run a mining industry?

"What they are proposing is an inefficient way of raising money. Why would you go to this much trouble to raise, in a sense, only $9 billion?

"This is not a large revenue stream for the Commonwealth."

The mood in the state's mining sector is becoming hostile among the largest miners, including giants BHP Billiton and Rio Tinto, as well as Fortescue Metals Group.

They fear their short and long-term business models would be significantly altered by the 40 per cent tax, suggesting some of their operations could be forced out of the state, and the country.

Rio Tinto chief executive Tom Albanese said the mining giant would not have invested so heavily in Australia over the years if the super profits tax was implemented earlier.

Mr Barnett said he last night discussed the tax with BHP Billiton chief executive Marius Kloppers, who was of a similar view.

"He (Mr Kloppers) is very angry, but he made the comment to me that Tom Albanese is even angrier," the Premier said. "Why would anyone be surprised?

"If you impose, as Kevin Rudd is intending, a 40 per cent super profits tax on the mining industry, suddenly Australia becomes unattractive, uncompetitive, for much of mining investment.

"It's hardly surprising the world's two largest mining companies - BHP Billiton and Rio Tinto - have that view."

Mr Albanese yesterday said at a mining conference in the US that the super profits tax would severely damage Australia's future investment climate.

However, during an at-times heated exchange with host Kerry O'Brien on the ABC's 7.30 Report last night, Mr Rudd said the growing anger by the mining sector was "fairly predictable".

"We think the right thing to do is to obviously consult with the industry, we've said we're open to do that on questions of detail of implementation, of transition, but I've got to say Australians need to have a fairer share of these profits being earned from a resource which the Australian people own," he said.

 

 

 

 

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