swan sells mining tax to us bankers

Swan sells mining tax to US bankers Brad Norington, New York From: The Australian October 12, 2010 12:00AM WAYNE Swan was due to sell Labor's idea of a tax on mining super-profits to Wall Street bankers early today.
His message is that the proposed impost is justified to "ensure Australians get a fair share".

In a speech prepared for an address at the New York Stock Exchange, the Treasurer said that claims the tax would stifle the mining sector were wrong.

"Contrary to some of the debate you might be hearing, what we know is that Australia is about to embark on its biggest mining investment boom since the 1850s gold rush," Mr Swan's speech said.

"This pushes us to pick up the pace of reform -- to make Australia an even more attractive investment destination. That's why we're cutting the company tax rate, to make our businesses more competitive."

The Treasurer's hard-sell to US investors and his claim that a resources rental tax would not harm the industry come despite widespread opposition from mining companies in Australia. There are also predictions the tax will deter overseas investment.


Mr Swan was due to spend the majority of his address at the New York Stock Exchange describing Australia as an economic success story compared with other developed nations, and part of the Asian region that would drive world growth this century.

His main message was to reinforce the strength of the Australian economy and sell the country's attraction as an investment haven.

On the controversial issue of the mining tax, Mr Swan said in his speech that a passionate debate over tax reform was under way in Australia and was driven by a need to "stay ahead of the pack".

"This tax will ensure that Australians get a fair share of the increase in the value of these resources," his speech said.

He stressed to his audience, which included executives from investment bank Morgan Stanley, that major mining companies had settled on an "agreed design" for the tax, and consultation was now under way on how to implement it.

"We plan to use these proceeds to cut the company tax rate for all businesses, invest in critical infrastructure and build an even bigger pool of retirement savings," he said.

According to Mr Swan, claims that a tax on mining super-profits would stifle the sector were not supported by data.

He said the latest survey of business investment plans showed companies overall were planning to invest $123 billion this financial year, an increase of 24 per cent on the previous 12 months.

He said mining investment plans were up almost 50 per cent, and mining companies were intending to invest five times more this year.