Australian Treasurer defends mining tax in talks with business leaders

The West Australian (WA) government was about to jack up its royalty rate for mining companies because it recognizes Australians were not getting a fair return, federal Treasurer Wayne Swan said on Monday.

Defending his own government's new 40 percent tax on mining company super profits on Monday, Swan said royalties recognized Australians owned the resources but the rates had dropped behind in recent years.

WA Premier Colin Barnett has been a vocal critic of the new mining tax along with mining companies and business leaders in his state.

Barnett has said his government's plans to raise royalty rates for BHP Billiton and Rio Tinto would simply remove them from a lower concession rate they had enjoyed for many years.

Swan, who is in Perth to talk to mining and business leaders about the new mining tax, said many mining leaders conceded they needed to pay more tax.

"Many acknowledge to me that there will have to be a bit more paid, that the Australian people haven't been getting their fair share for their 100 percent ownership of these resources," Swan told ABC Radio.

Swan said royalty rates had not reflected the substantial increase in value that had occurred in the mining sector.

"About one dollar (0.875 U.S. dollars) in three of mining profits at the beginning of the decade came in royalties, now it's about one dollar (0.875 U.S. dollars) in seven," Swan said.

"At the moment the (WA) state government is about to jack up their royalty rates because they recognize that the West Australian people and the Australian people are not getting fair value here."

Federal Resources Minister Martin Ferguson took a swipe at Barnett and mining giants on Monday, saying this week's WA budget would boost the iron ore royalty rate for BHP and Rio Tinto and reap about 300 million dollars (262.65 million U.S. dollars).

"It will be interesting to see whether they (BHP and Rio Tinto) squeal or just sit in the corner and say let's get on with life," Ferguson told reporters.

Barnett has said he was still negotiating with BHP and Rio Tinto over royalty increases.

Swan said the government was genuine in its desire to negotiate with mining companies over the design of the new tax.

Source:Xinhua