In another setback to the mining tax proposed by the federal government a senate inquiry found that it would affect Australia’s competitiveness and should be cancelled. The Western Australia Liberal senator and committee’s chairman Mathias Cormann summarized the findings on the minerals resource rent tax (MRRT) in Perth.
As per the findings of the inquiry the tax was developed through an improper process and would create a $19 billion black hole in the federal budget. Senator Cormann said that it should be scrapped and of course the Government should start from scratch with a genuine process, one that is open, inclusive and transparent and one which includes all stake-holders, including State and Territory Governments as part of the process.
The report was released at a miner’s conference and opposed Greens leader Bob Brown’s claim that most of the mines in Australia were owned by foreigners. Andrew Forrest the chief executive of Fortescue Metals Group said that what Mr Brown needs to do is to not support a tax that will exacerbate that situation and shift Australian ownership and development projects offshore because they can no longer afford to compete against projects that are already developed.
A spokesman for federal Treasurer Wayne Swan said that Senator Cormann had rushed out a half-baked and blatantly political report so he could tell a miners’ conference that they paid too much tax. He added that with a $430 billion pipeline of investment the resources sector had a bright outlook and the Opposition scare campaign about the industry’s future was complete rubbish.
Association of Mining and Exploration Companies (AMEC) chief executive Simon Bennison was happy with the report saying that the MRRT raises serious and unresolved constitutional issues which will clearly affect the international competitiveness of emerging companies and further detrimentally impact Australia's sovereign risk as an attractive place to invest. He also called on the government to scrap the proposed tax.