Abbott meets mining bosses, rejects tax

Federal Opposition Leader Tony Abbott has ramped up his hostility towards the
super-profits tax following a meeting with mining executives, warning the only way
of avoiding it would be to elect a coalition government.
The comments came as mining stocks recovered some lost ground on Wednesday after
being heavily sold off in recent days.
The materials sector was up 0.21 per cent and the main resources index rose 0.05 per
cent.
BHP Billiton rose 15 cents, or 0.39 per cent, to $38.74 while rival Rio Tinto
finished up $1.22, or 1.82 per cent, at $68.28.
Fortescue Metals Group, hit hard by fears of the new tax, rebounded to finish up 25
cents, or 6.16 per cent, at $4.31.
Prime Minister Kevin Rudd, following his own meeting with mining chiefs in Perth,
maintained the viability of the resources industry was not in jeopardy as a result
of his tax reform plans.
The comments were supported by global credit ratings agency Fitch Ratings, which
said the tax would not damage the long-term prospects of resource companies such as
BHP and Rio Tinto.
Fitch said should the tax become a reality, the combined tax burden on the companies
could exceed $3 billion but would not jeopardise the ability of either to service
and repay their debts.
Mr Rudd spent a second day in the resource capital of Western Australia on
Wednesday, meeting with industry representatives who have complained the proposed
tax would cost investment and jobs.
The prime minister, who attended a resources industry breakfast in Perth, said
mining chiefs had been forthright in putting their concerns to him at dinner on
Tuesday night.
"I was equally forthright in explaining why it's necessary for the good people of
WA, because there's a big call here for greater investment in the state's
infrastructure," he said.
Mr Rudd also defended the proposed tax amid the continued fall in the value of
mining stocks, saying share prices always fluctuated and would continue to do so
regardless of the tax.
"It is important to pay emphasis on the independent modelling of Treasury who's put
all the factors together and projects this industry will grow by 6.5 per cent over
five to 10 years," he said.
"As a result of these measures we will see a better and more dynamic mining industry
in the future."
The opposition leader, following his own meeting with senior mining figures in
Canberra, said the only way to avoid the tax being introduced would be to elect a
coalition government.
The government has already made it clear the legislation needed to introduce the tax
would not be introduced into parliament before the next election.
"I had a very good meeting with senior mining executives and I reiterate that I can
see no good arguments for this great big new tax and I can see no way that a
coalition could support it," Mr Abbott said.
"Certainly, the only way to avoid it is to ensure that there is a change in
government at the election."
Mr Abbott warned Australian jobs would "evaporate in the tens of thousands" unless
there was a change in government.
BHP Billiton chief executive Marius Kloppers indicated ahead of his meeting with Mr
Abbott that the mining industry was prepared for a long campaign against the new
tax.
"We've got a long job ahead of us," Mr Kloppers told reporters as he entered
Parliament House.
The head of rival miner Rio Tinto's Australian operations, David Peever, also met
with Mr Abbott.
But Fitch Ratings senior director Julian Crush said the long-term viability of
resource companies, including BHP and Rio Tinto, would not be damaged by the tax.
"There could be some rethinking on investment for new natural resources projects
resulting in a negative cash tax impact on miners, but this news does not mark the
beginning of the end for the Australian mining industry," he said.
"Demand for their product is simply too strong."