Australian opposition to meet BHP and Rio Tinto for tax reform

10:42, May 05, 2010      

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Australian Opposition Leader Tony Abbott on Wednesday said he will meet with executives from BHP and Rio Tinto to discuss the impact of government plans to tax the profits of mining companies.

Abbott said the prime minister should have consulted the mining sector before making the announcement.

"This is the industry which kept us out of the global financial crisis, this is the industry which most of all gives us a competitive advantage in the world," Abbott told Macquarie Radio Network.

"This doesn't just hurt foreign shareholders, this hurts the mums and dads of Australia whose superannuation funds are invested in BHP and Rio and Fortescue and these other companies."

The federal government said Australians deserve a greater share of the wealth generated by mining the resources they own.

The opposition has given its strongest indication yet that it will vote against the tax.

"In this form, I can't see how we could ever support it," opposition finance spokesman Andrew Robb told Sky News, adding that it was unlikely to be introduced before the next election.

Robb has also compared the effect of the announcement to the impact on world markets of the debt crisis in Greece.

"It's up there with what's happening in Greece, can you believe, in terms of its reaction on world markets," Robb said.

Rio managing director for Australia David Peever said the company intended to play a constructive role in the consultations with the government, but warned the tax could erode Australia's competitiveness.

"Altering the rules for existing multi-billion dollar projects in mid stream - after large amounts of capital have already been put at risk over many years - would be the worst possible message Australia could send to investors," Peever said.

Prime Minister Kevin Rudd has been under pressure to dilute his tax reform agenda with industry leaders complaining it will see projects cancelled and jobs costed.

Billions of dollars have been wiped off the value of shares in Australian mining companies since the super-profits tax proposal was announced on Sunday.

The meeting comes as fallout continues over the announcement that a 40 percent super-profits tax would be applied to the resources sector from July 2012.

Rudd had his own meeting with mining executives in Perth on Tuesday night and Wednesday morning.

Source: Xinhua


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