Miners, govt trade blows on profits tax

Australia's two biggest miners have launched a new offensive against the
government's super profits tax but Labor has hit back with claims industry bosses
are prone to lying.
Labor remained on the back foot over its mining super profits tax even though a new
survey showed the impost was winning support in the broader community.
The latest survey by Essential Research found total support for the tax was 43 per
cent compared with 36 per cent opposition.
However, it's unlikely to deter the mining sector, which showed no signs it's in a
mood to compromise.
BHP Billiton took aim over government claims Australia's biggest miner only pays a
paltry amount of company tax, while rival Rio Tinto warned the impost was damaging
the nation's investment reputation.
It was part of the continuing stoush over the tax as parliament resumed on Monday.
Treasurer Wayne Swan opened up a new line of attack against the coalition - which
will wind back the tax if it wins government - claiming its levy for paid parental
leave was much more damaging to the Australian economy.
He told parliament the tax was about a fairer distribution of Australia's mineral
wealth.
As an added bonus, it would grow the economy, boost investment and reduce prices.
By contrast, Mr Swan argued, the coalition's 1.7 per cent impost to fund paid
parental leave would reduce growth and investment, while adding to inflation.
"This side has a pro-growth, pro-investment policy to leverage Australia's
strengths, but that side does not," he said.
Mining bosses were under fire too.
Mr Swan accused the big miners of peddling a number of myths, singling out claims
every return above six per cent would pay the impost.
"I regret to say this is a calculated and deliberate misrepresentation," he said.
"If you hear a mining executive saying it, they are either lying to you or they are
ignorant - either way it should be of concern to their shareholders."
But the opposition pointed out this argument was at odds with an early explanation
from Prime Minister Kevin Rudd of a super profit being returns in excess of the
"long-term government bond rate, that runs at about six per cent".
BHP Billiton took another swipe at the government on Monday over its assertions that
global miners were paying around 13 per cent company tax.
In a statement, the company's chief financial officer Alex Vanselow expressed
disappointment at the government for "misrepresentation" over the amount of tax it
pays.
"It concerns BHP Billiton that inappropriate conclusions appear to have been drawn
from a study by two academics from a United States university," he said.
On Sunday, the government quoted figures from the US-based National Bureau of
Economic Research showing multinational miners in Australia pay less company tax
than they would in Canada, the United Kingdom or the United States.
The opposition described the research as a "shonky piece of work" by a graduate
student under the supervision of his professor.
"It's amateur hour," opposition finance spokesman Andrew Robb told reporters.
But the professor at the centre of the row told News Ltd it was "erroneous" to claim
it was just a graduate student's paper.
At the same time, University of Carolina Professor of Taxation Douglas Shackelford
admitted it was a work in progress and its usefulness was limited.
Rio Tinto weighed in with a warning that the tax could deter investment in Australia.
"It does change the relative attractiveness of Australia versus the other countries
that we do invest in," chief executive Tom Albanese said.



Delete & Prev | Delete & Next