Australian government stays firm on mining tax

11:14, June 16, 2010      

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Australian federal government on Wednesday ruled out the prospect of applying modified rates to its resource super profits tax in a bid to end a damaging row with mining companies.

It also has rejected suggestions special deals may be negotiated with individual companies.

The government has been under pressure from its own lawmakers to reach an agreement with the industry before an election, likely in the next few months.

During a caucus meeting on Tuesday, a handful of lawmakers pressed the importance of getting a quick resolution to the issue that has seen Labor hammered in the opinion polls.

The controversial measure was responsible for a sharp slump in support for Labor in resources-rich states, Western Australia and Queensland.

One suggestion has been to modify the 40 percent resource super profits tax by changing the rules for different minerals.

Resources Minister Martin Ferguson has acknowledged the industry may have a point in arguing the "one-size-fits-all" model is not practical, but he rejected suggestions that might lead to a change in the tax rate.

"I made it very clear to caucus (on Tuesday) we're not talking about different tax rates," Ferguson told ABC Radio on Wednesday, adding there will be a "headline" rate of 40 percent.

"What we have said we are prepared to focus on ... are the potential generous transitional arrangements."

Ferguson also ruled out making "special deals" or offering " special incentives" for some sectors of the resources industry.

"Not at all," he said when asked whether the government was planning a divide-and-conquer strategy.

"I'm trying to work through what are the challenges to particular sectors."

Ferguson used the example of British Gas, which held discussions with the government on Tuesday about its 15 billion dollars (13 billion U.S. dollars) Queensland Curtis Liquefied natural gas (LNG) project at Gladstone.

The company said a final decision on the project would be made later in the year when it had considered "acceptable fiscal terms, " and state and commonwealth environmental approvals.

Australian Greens leader Bob Brown Wednesday urged Labor to stay strong on its tax, saying "The Greens' advice to the prime minister is hold firm."

Infrastructure Minister Anthony Albanese on Tuesday blamed the "shallow" media for failing to explain the details of the tax to the public.

Labor backbencher Julie Collins said voters in her electorate understood the tax was "a good thing" that would bring them their "fair share" of resource profits.

Caucus members described Tuesday's meeting as calm and positive, with Treasurer Wayne Swan and Resources Minister Martin Ferguson outlining progress have been made in negotiations over the 40 percent resources sector tax.

Source: Xinhua


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