Data provided by iNet BFA
Loading...
See More

Australia pitches new deal to miners

Jun 30 2010 09:07

Related Articles

BHP pulls anti-tax ads

Xstrata halts Aus projects over tax

Fresh attack on Australian mining tax

Tax will slow investment, warns BHP

BHP: Tax may hurt Rio JV

 

Canberra - Australia's government has pitched to mining firms a compromise offer on a controversial tax, a newspaper said on Wednesday, in a move that could clear the path for new Prime Minister Julia Gillard to call an election.

The offer, tipped by media to be announced later on Wednesday, includes concessions to industry on the impact of the tax on existing projects, an increase in the level where the tax kicks in and an immediate write-off on new capital expenditure, the Australian Financial Review said without citing sources.

Based on the offer, Australia's fledgling liquefied natural gas sector would be a key winner, as it would be taxed under terms similar to the petroleum resource rent tax, which currently applies to offshore oil and gas companies, the paper said.

Prime Minister Gillard, who ousted Kevin Rudd last Thursday, has pushed for a rapid compromise with the industry over the 40% tax that was designed to raise A$12bn, because the row has damaged the ruling Labour's popularity just months before general elections.

Expectations are that shortly after Gillard reaches a deal with miners, she will call an early election to capitalise on her honeymoon period as new leader.

A Nielsen poll over the weekend, the first since Gillard took over, gave Labour a 55-45 lead over the conservative opposition, indicating an eight-point swing to the government.

Gillard defended the need for a mining tax on Wednesday, though she did not give any specific hints about a compromise.

"The difference with mining is the key resource is our (the people's) resource... and we have to price it properly because we only get to dig it up once."

The Australian Financial Review reported the compromise offer would involve resource firms losing some of their generous rebates and write-offs under the initial tax proposal, but is not thought to include a reduction in the headline 40% rate.

A spokesperson at the Treasury office declined to comment on the report of a compromise.

The proposed mining tax threatens more than $20bn in investment, according to angry mining companies, but no major project has yet been scrapped and several have actually been advanced since the tax was unveiled on May 2.

Mining industry groups suspended a hostile advertising campaign against the tax last week after Gillard promised to negotiate with the industry.

A mining industry source denied reports that the industry could restart the campaign soon if there was no compromise reached.

"As long as the government's working to get an outcome, as long as there's genuine negotiation, there won't be any more ads," said the source, who declined to be named due to the sensitivity of the talks.

 - Reuters

julia gillard  |  super tax
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

How you get trapped by debt

Borrowing money is so quick, so easy - and so deadly, says Susan Erasmus.

 
 

Start saving...

Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account
All about endowments

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...