UK mining industry hits out at Aussie tax plans

UK mining share prices were hit this morning in a response to Australia’s
plan for a 40% tax on their profits.

The “resource rent” tax, due to come into effect in two years, would raise
BHP
Billiton’s tax burden from 43% to 57%.

“If implemented, these proposals seriously threaten Australia’s
competitiveness, jeopardise future investments and will adversely impact the
future wealth and standard of living of all Australians,” said its CEO Marius
Kloppers.

“The government has not defined all aspects of the design, implementation and
application of the new tax, and until they are clarified we cannot be certain
what the full implications for the industry will be,” he added.

Its share price fell more than 4% to £19.36 this morning.

Rio Tinto MD
Australia David Peever said it was crucial that the changes should not affect
other parts of the Australian economy.

“All Australians benefit from a strong mining sector. In the same way all
Australians are affected by measures that hurt the mining sector. Australia was
saved from the worst of the GFC by the strength of the resources sector, but the
same industry is now being portrayed by the government as not paying its way,”
said Peever.

“Taxing 40% of profits over the long-term bond rate, together with
corporation tax, would make the Australian minerals sector the highest taxed in
the world, seriously eroding competitiveness.”

Its share price fell 1% to £32.68.

Further reading:

Aussies
to cut 30% corporation tax rate