The Australian Federal Government secretariat charged with listening to the concerns of the mining industry to the proposed Resources Super Profits Tax (RSPT) has been criticised as being “too wedded” to the tax, and not adequately empowered to discuss the most problematic features of the proposed reforms. The claim of inadequacy was levelled today by South Australia’s peak mining lobby, the South Australian Chamber of Mines and Energy (SACOME).
The single day of hearings in Adelaide last Friday by the Secretariat of the Federal Government’s Resource Tax Consultation Panel (RTCP) – not the panel itself – was SACOME says, frustrating for members of the South Australian resource industry who wanted to voice their concerns on the structure of the reforms.
The one-day hearing is the only scheduled date for the South Australian resources industry to express its concerns about the reforms – in spite of SA being home to the world-class Olympic Dam mine where a planned A$20 billion expansion is now threatened by the tax.
“The so called consultation appeared to be little more than an attempt by Treasury representatives to sell the tax to our industry rather than to try and understand our concerns,” SACOME’s Chief Executive, Jason Kuchel, said. “Of critical concern is the fact the Secretariat showed a lack of understanding of the cyclical nature of the mining industry. Members appeared very much stuck on the theory of their taxation ideals and do not sufficiently grasp the realities of the mining world and the national economic impacts of this proposed impost,” he said.
“Their main focus was little more than a sales pitch and was restricted to the implementation of the tax. It became patently clear that Treasury’s desire is to maintain the integrity and purity of the tax as proposed. How can every local, national and international company with an interest in exploration and mining in South Australia, get any comfort that the voice of one of the nation’s prominent mining states is being heard in Canberra?
“Issues of greatest importance to our miners, such as flow through share schemes, are not even on the table for consideration. Until the Government drops its inflexible approach to its consultations, it is a waste of time for the industry here or anywhere in Australia to make representations to the Secretariat or Panel.”
Kuchel said SACOME would seek a direct meeting with the RSPT Panel members to lobby against the tax in its current form. SACOME said earlier this month that up to A$40 billion worth of mining projects in South Australia could stall because of the proposed RSPT. The Chamber is expected to soon release an independent audit of the impacts of the tax if it were to be imposed across the sector’s current and planned South Australian exploration and mining projects.
Queensland’s self-professed ‘favourite sons’ are preparing to strip the state of A$2.5 billion by transferring the proceeds of the proposed resource super tax to other states and territories, Queensland Resources Council Chief Executive Michael Roche said. ‘On State of Origin eve, it’s difficult to imagine an uglier high shot against Queensland than the tax being proposed by Kevin Rudd and Wayne Swan,’ Roche said.
Based on federal budget and Grants Commission data, Queensland resource companies are forecast to pay an additional A$4.5 billion to the federal government in the first two years following introduction of the super tax in 2012-13. Over the same period, budget tax concessions and infrastructure spends earmarked for Queensland from the new tax total just A$2 billion. “That means a net loss to Queensland of $2.5 billion, under an Australian Constitution that decrees Queensland’s mineral wealth belongs to Queenslanders, not the entire country.
“That’s why Queenslanders benefit directly from minerals and energy royalties paid to the state government, with the contribution next year forecast to be A$3.2 billion and A$13 billion over the next four years.”
Why would Queenslanders act against their state of origin? is the question posed by the Queensland Resources Council in newspaper advertisements published June 16 in newspapers across Queensland.
“So far, we’ve heard nothing from either the Prime Minister or the Treasurer on this tax rip-off and I know that more and more Queenslanders are getting more and more uncomfortable with the idea of sending the state’s resource wealth south,” Roche said.