Rio “hopeful” on sensible tax outcome

Rio Tinto iron ore boss Sam Walsh said the mining giant was "hopeful" that new prime minister Julia Gillard's offer for comprehensive negotiations over the planned mining tax was genuine.

Speaking at the opening of its $60 million high tech remote operations centre near Perth airport today, Mr Walsh re-iterated that the company was encouraged by Ms Gillard's initial moves to cancel the government's pro-tax advertising campaign and seek constructive negotiations with the industry.

"We have said we will sit down and negotiate with the government," Mr Walsh said. "We are just hopeful that with the changes, the government will seriously engage with us."

Mr Walsh said that Rio, like the rest of the mining industry, believed it already paid enough tax and was fundamentally opposed to the mining tax as initially proposed.

However, the company accepted that taxation regimes changed over time and was willing to participate in reform.

"We do believe that we are paying our fair share of tax, however we recognise that life moves on. We recognise that tax regimes will actually be modified over time, and we are willing to take part in that reform process," he said.

However, Rio's key requirements of any change to the tax regime remained unaltered.

"We believe that it needs to be fair, we believe that it needs to be competitive with other regimes around the world, and we do not like the retrospectivity of the resource super profits tax as it was initially described," Mr Walsh said.

Mr Walsh declined to answer how long the industry was prepared to give Ms Gillard to take definitive action before calling off the current truce.

Premier Colin Barnett said he continued to believe that the proposed tax should be abandoned entirely, and that would be the only way that Ms Gillard could realistically resolve the matter before a federal election is held later this year.

"That would be a good resolution, but if the federal government is going to persist with this, I'd say they'd need to take at least six months to get some understanding of the industry ... that has never been done."

While he believed there would now be "a genuine attempt to go back" and review the issue under Ms Gillard, Mr Barnett warned the sector not to let down its guard.

"I'd say to the industry don't relax, don't assume this problem has gone away," he said.

He also had some pointed advice to tax architect, treasury secretary Ken Henry.

"He should just stick to his job being secretary of the treasury and preparing budgets, not trying to pretend he's a mining expert, because he's not," Mr Barnett said.