Watered-down MRRT should add gold: Brown

22 Feb 2012, 5:13 pm   -   Source: AAP
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Senator Brown is sitting in on the Senate inquiry into the minerals resource rent tax (MRRT). (AAP)

Senator Brown is sitting in on the Senate inquiry into the minerals resource rent tax (MRRT). (AAP)

Australian Greens Leader Bob Brown says he will continue to press the federal government to include gold and other minerals in its proposed mining tax.

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Australian Greens Leader Bob Brown says he will continue to press the federal government to include gold and other minerals in its proposed mining tax.
  
Senator Brown, who is currently sitting in on the Senate inquiry into the minerals resource rent tax (MRRT), also told reporters in Canberra that it was "daft" to be refunding royalties to mining companies under the proposal.
  
He said Treasurer Wayne Swan needed to reconsider extending the mining tax to gold, uranium and other minerals, although he added he would not block the MRRT legislation.
  
"The nexus with royalties should also be dropped - it's daft. States have the right to set their own levels of royalties but the open cheque book approach to refunding companies being taken by the federal treasurer is nonsensical," Senator Brown said.
  
He said adding gold to the MRRT coverage would add $840 million to revenue over the forward estimates and $1.8 billion over the next 10 years.
  
"Australia has the means to adequately fund education, health, transport," he said.
  
"It should not have a watered-down mining tax pass into law that fails to collect potential funding sourced from resources that belong to the nation."
  
He said in 2010, four of Australia's biggest gold mining companies were 100 per cent foreign owned and, overall, the industry was 81 per cent foreign owned.
  
The 30 per cent MRRT on the coal and iron ore profits of big miners has already been passed by the House of Representatives and is awaiting the approval of the Senate.



MINING WILL NEED TAX INCENTIVE IN FUTURE

The Australian resources industry will need government tax incentives to remain competitive on the world stage once the African mining sector gets into full swing, a mining boss says.
  
During sometimes heated exchanges at a Senate inquiry into the federal government's proposed mining tax, iron ore miner Atlas Iron Ltd managing director David Flanagan said deposits of iron ore, gold and other resources in African countries were "massive".
  
"Once they get up and running Australia's significance globally as a provider of resources is going to fall," Mr Flanagan said.
  
"So we have an opportunity to remain competitive and ultimately we are going to need tax incentives in Australia to be able to sustain our business against the competition from those countries."
  
The chair of the Senate's economics legislative committee, Labor senator Mark Bishop, pointed out that many of those African countries also had "governments with guns", meaning there was a high degree of political risk that could create instability.
  
The committee is inquiring into the minerals resource rent tax (MRRT), which will impose a 30 per cent levy on the coal and iron ore profits of big miners as part of a government bid to spread the benefits of the current resources boom in Australia.
  
Mr Flanagan described the MRRT as a "quick fix tax" that was being pursued for political reasons, saying it would be detriment to the country.
  
"Of all the things that I worry about, I worry about the future because of the way you (Labor) are running this country," Mr Flanagan said in response to a series of questions from Labor senator Doug Cameron.
  
He said that for every dollar taken off his business over and above what's "fair dinkum" slowed it down from being able to invest and create jobs.
  
But Senator Cameron said Mr Flanagan was not being "fair dinkum" with his company's shareholders and the stockmarket because, even though he claimed the tax would have "dire consequences", it was not mentioned in Atlas' annual report.
  
"You come here running a political agenda but when you are talking to the stockmarket, when you are talking to your shareholders, when you are taking to your AGM (annual general meeting), you don't mention it," Senator Cameron said.
  
"You are continuing to have massive growth, massive profitability, that's the reality."
  
Mr Flanagan said his shareholders would "need to be living under a rock" not to know that there was uncertainty about the implication of the MRRT, insisting that it was mentioned in the annual report.
  
Trade unions are supporting the tax, with ACTU secretary Jeff Lawrence telling the inquiry the MRRT should be passed into law as soon as possible.
  
Construction, Forestry, Mining and Energy Union national research director Peter Colley believed it was a "good tax" which would go down in history as a major reform.
  
That said, the MRRT could have been better and broader given there were plenty of other minerals sectors that were also hugely profitable, such as copper and gold, he said.
  
He did not agree it would stymie investment in Australia, because China and India were "falling over themselves" to invest in the local market, as were a number of US firms.
  
He said there was "plenty of sovereign risk" in Africa.
  
"Most companies that have ever invested in Africa lost their shirt," Mr Colley told the hearing.
  
"That may change, but Africa is still an incredibly difficult place to do business."
  
Senate committee member Australian Greens Leader Bob Brown also believes the MRRT should be extended to include gold, uranium and other minerals, although he won't oppose it in its current form.
  
The tax, which is expected to raise $11.1 billion in the first three years, has passed the lower house is now awaiting the approval of the Senate.

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