New super profits tax will hurt economy: West Australian premier

16:14, May 19, 2010      

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West Australia state premier Colin Barnett has indicated the decision by Fortescue Metals Group (FMG) to put projects on hold is a sign the proposed new super profits tax will hurt the Australian economy.

FMG revealed on Wednesday projects worth 17 billion Australian dollars (14.6 billion U.S. dollars) that have been put on hold due to the federal government's Resources Super Profits Tax may be sold to foreign firms.

FMG chief executive Andrew Forrest called on Australian Prime Minister Kevin Rudd to abandon the tax, which the billionaire dubbed "an attack on Australian competitiveness".

Barnett said he hoped Rudd and the federal government were taking note of the impact of their new 40 percent tax on mining company super profits.

"I think it's of great concern that every day we are seeing announcements like FMG today saying that future projects are basically on hold," he told reporters.

"It's symptomatic of a serious problem for the Australian economy."

Companies were re-examining all of their investment and business decisions in the mining industry in light of the new tax, Barnett said.



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