Australian gov't tips on tax package adjustment

The Australian government warned on Thursday it may have to fore-go company tax cuts and higher superannuation contributions to offset any loss of revenue from a likely deal with mining companies over the resource super profits tax.

The government is sticking firm to its commitment of returning the budget to surplus within three years, with plans to use some of the revenue from the tax to help pay down the current deficit of 57.1 billion dollars (47.63 billion U.S. dollars).

"We won't compromise the budget moving back into surplus in three years," Assistant Treasurer Nick Sherry told ABC Radio.

Sherry warned there be may "an adjustment" to other elements of the government's tax package, of which the super profits tax was a part.

Those other elements include cutting the company tax rate from 30 percent to 28 percent, and lifting compulsory superannuation contributions from 9 to 12 percent.

Business is concerned that company tax cuts will be a casualty of any deal, while the superannuation component is retained.

The prospects for a modified version of the tax strengthened on Thursday with Treasurer Wayne Swan again indicating the government 's willingness to negotiate with miners.

"I don't intend to put any boundaries around those discussions, " Swan told Fairfax Radio Network.

The opposition has no intention of supporting a deal, saying it will rescind the tax if it wins power in the next election.

"It will be a deal done with the government holding a gun to the miners' head," opposition resources spokesman Ian Macfarlane said.

It was "almost impossible" to imagine any sort of deal which did not leave the mining industry less competitive internationally.

"On that basis alone we would rescind the tax," Macfarlane said.

Source: Xinhua