BHP Billiton has joined the debate surrounding the Labor party's use of an American university student's report in to the disparity between the tax payed by mining giants as Treasurer Wayne Swan took another swipe at the sector.
BHP Billiton has joined the debate surrounding the Labor party's use of an American university student's report in to the disparity between the tax payed by mining giants as Treasurer Wayne Swan took another swipe at the sector.
BHP denied federal government accusations that multinational miners paid as little as 13 per cent tax, releasing figures which showed its effective tax rate was 43 per cent.
The company was responding to the federal government's use of a US study which the opposition described as amateur hour because it had been done by a student. The Minerals Council of Australia also responded using the Australian Tax Office's own figures to show miners paid almost 28 per cent tax, before royalties bumped the rate up to more than 41 per cent.
However, Mr Swan launched a staunch defence of the government's proposed super profits tax on miners, accusing some resources company bosses of "lying" or being "ignorant" to the details of the proposed super profits tax.
"I didn't expect our reforms to be greeted with singing miners in the street," Mr Swan said.
"Nor did I expect any support for strong economic reform from an opposition that showed last week it has completely lost what little grip it ever had on economic policy."
The government may be bouyed by some smaller resource companies indicating that the new tax won't impact their plans.Atlantic Resources claims the RSPT will not materially impact its Windimurra Vanadium mine operations, saying despite the obvious impact the super profits tax will have on the industry, the project's large capital base will protect it from being affected by the proposed tax.
Iron ore player Brockman Resources also released a statement, with the aim of correcting "inaccurate market speculation arising from the uncertainty created by the federal government's proposed RSPT. Brockman said its recently developed strategic relationship with Sinosteel Australia has been in no way adversely affected by the speculation over the affect the RSPT will have on the mining industry, as suggested by "claims made in a Dow Jones Newswire report".
Meanwhile BHP "expressed disappointment at the misrepresentation of the level of taxes paid by BHP Billiton on its Australian operations," a BHP statement said.
Debate errupted over the use of the student's report, which quoted BHP as paying just 13 cents in the dollar, in a statement made by the Labor government on Sunday.
BHP chief financial officer Alex Vanselow said, "At the time the Australian Government announced its proposed new super tax, BHP Billiton clearly stated that in the 2009 financial year it paid total taxes to Australian governments of A$6.3 billion, resulting in an effective tax rate of around 43 per cent."
Mr Vanselow expressed concern that lower tax rate numbers were being attributed to the tax paid by BHP Billiton: "It concerns BHP Billiton that inappropriate conclusions appear to have been drawn from a study by two academics from a United States university. A more accurate and meaningful method is to use the actual tax payments and returns submitted by companies in Australia."
BHP Billiton pays three broad levels of taxation on earnings in Australia; they are
Company tax that is paid on the taxable income of the business; royalties that are paid on the value and/or volume of resources extracted; and other production taxes that are paid on the value of oil and gas resources extracted.
Total taxes paid by BHP Billiton's Australian operations in relation to the financial years 2004 to 2009 inclusive exceeds A$24 billion.
Mr Vanselow said, "The 2009 earnings of BHP Billiton's Australian operations were almost fully reinvested back in Australia in the form of taxes, royalties, capital applied to new and existing projects and dividends to shareholders."
