PERTH (miningweekly.com) Australias 40% tax on resources profits...

PERTH (miningweekly.com) Australias 40% tax on resources profits would affect A$170-billion worth of mining investment in Western Australia over the next five years, the states Mines and Petroleum Minister, Norman Moore, said on Tuesday.

We, as the state government, are vigorously opposed to the Kevin Rudd government tax, he told the Association of Mining and Exploration Companies (Amec) convention in Perth.

Moore said that the Western Australia government would investigate the constitutionality of the proposed super profits tax (SPT), once the legislation becomes available, and that it might take the case to the High Court.

"But I need to say, however, that if you look at the past history, the capacity of state governments to win in the High Court, has been very limited indeed."

Amec CEO Simon Bennison also pushed for the government to scrap the proposed SPT, calling the current arrangement totally unacceptable.

We have asked the [consultation] panel that we want an opportunity to start with a clean slate. Tweaking around the edges of a 40% tax and the long-term bond rate will not reach a compromise suitable for all, Bennison said.

Amec president Will Robinson said that while the SPT has been labelled as a tax on super profits, it was in actual fact a A$9-billion cash injection into the federal budget, over the next three years.

He added that while the larger resources companies, such as BHP Billiton and Rio Tinto might have been the initial targets for the SPT, small and medium-sized mining companies would also suffer, as they struggled to raise capital for projects.

Federal treasurer Wayne Swan on Tuesday said that he had received a progress report from the consultation panel, which has been meeting with industry participants, but was unwilling to divulge the details of the report.

I'm not going into the detail of what has come through out of that consultation report, but the government is absolutely determined to proceed with the tax within the framework that I outlined on May 2, and that framework has great integrity. We will take on board feedback from the industry, I've said that from day one as well, and many companies are providing that feedback in a constructive way.

INFORMATION CAMPAIGN

Meanwhile, Swan has defended the governments decision to spend A$38-million on an advertising campaign regarding the proposed mining tax, and accused the mining industry of misinforming the public.

I don't make any apologies whatsoever for having a public information campaign, Swan told a local radio station on Tuesday.

He noted that the government took the view prior to that announcement that there was, and would be, a need for a substantial public information campaign, and had begun developing that campaign.

All that has occurred here is that that campaign has been brought forward as a consequence of a massive misinformation campaign which has been put forward by the mining industry. They are said to have in the war chest up to A$100-million to spend."

Edited by: Mariaan Webb