The Abbott administration is progressing with plans to repeal Australia’s mining tax, a move that it says will deliver $13 billion worth of savings to the budget over the forward estimates, the Guardian reported.
Repealing the mining tax was one of Tony Abbott’s signature election commitments. On Oct. 24, the government produced an exposure draft of legislation repealing the mining tax among other changes. Effective from 1 July 2014, the draft confirmed it intended to axe a raft of other measures introduced by the previous government in association with the minerals resource rent tax (MRRT) regime, including tax relief for small business and additional superannuation contributions for low-income earners.
The repeal legislation sets the stage for another policy confrontation once the new parliament sits. Labor and the Greens have the numbers in the Senate until July 2014.
In pressing ahead with the mining tax repeal, the government also signaled plans to extend the existing petroleum resources rent tax to onshore coal seam gas as well as offshore reserves, but indicated it would address industry concerns about red tape, the Guardian reported.
While the coal seam gas industry has thus far appeared sanguine about taxing onshore projects, smaller companies are concerned about compliance costs. Cabinet has considered the streamlining issue, and will hold further talks with the gas industry before unveiling the new rules.
Treasurer Joe Hockey, releasing the repeal legislation for industry comment, said the mining tax was “a complex and unnecessary tax which struggled to raise the substantial revenue predicted by the former government”.
“Further still, this failed tax imposed significant compliance costs on one of our most important industries, while damaging business confidence which is critical to future investment and jobs,” Hockey said.