Territory miners rage against Labor machine Updated May 3, 2010 11:57:00
The Northern Territory branch of the Minerals Council of Australia says investment will fall if a new tax is imposed on miners, but the Territory Government disagrees. In its response to the Henry tax review, the Federal Government announced yesterday it would tax the above-normal profits - known as super profits - of the mining industry to fund a superannuation rise and a company tax cut. The Government expects to raise $9 billion a year from the 40 per cent super profits tax. The executive director of the Territory's Minerals Council, Scott Perkins, says that will have serious consequences in the Territory. "What it'll really do in the Northern Territory is provide another hurdle to opening up new mines on top of the already huge investment problem of funding infrastructure, because we're totally lacking in that," he said. Mr Perkins says miners are already paying enough tax and the "demonisation of the mining industry is totally unfair". But Territory Treasurer Delia Lawrie says the new tax meets the fairness test. "It's a profit-based tax, that is, it recognises companies' ability to pay," she said. "I wouldn't expect any resources company to be embracing a 40 per cent profit-based tax regime. "At the same time, there is some joy in there in terms of some tax rebates for exploration, which is what you need to promote to lead to mines coming online." Chief Minister Paul Henderson says he does not believe the Federal Government would do anything to endanger the mining sector. "Whatever we do, our mining sector here in Australia has to be internationally competitive," he said. "I don't believe the Commonwealth Government will do anything to harm our international competitiveness. Our resources industry is one of the great strengths of the Australian economy." But the Country Liberals say the tax changes will hobble the mining industry to support resource-poor states. The Opposition's John Elferink says Mr Henderson should be protesting against the new tax. "He just seems to be a sycophant to the Kevin Rudd Labor machine, but the fact is that those states which have a bit of testicular fortitude - such as Queensland a Western Australia - are saying this is not good for the resources sector," he said. Small business fears
Meanwhile the Northern Territory Chamber of Commerce says it is disappointed with the Federal Government's response to the Henry review. The chamber's chief executive, Chris Young, says it is unfortunate the Government has ignored key recommendations that would help business. "One of the major recommendations that came out of the Henry review which has been conveniently overlooked at this point in time was actually to abolish payroll tax," he said. "Payroll tax is in effect a tax on jobs, so our view is that these parts of the Henry tax review have been conveniently ignored at this point." Mr Young says the benefits from measures like the reduction in income tax will be outweighed by the increase in the superannuation levy. "The downside as far as small business is concerned is the increase in the superannuation guarantee levy, which is going from 9 per cent to 12 per cent," he said. "At the end of the day it's small business that employs the vast majority of employees. That's not going to be such a good look as far as small business is concerned."
