Australia opposition sets sights on mining and carbon taxes

June 27, 2013

The repeal of taxes on mining profits and on carbon will be the top priority of the Australia’s conservative party if it wins power in September’s elections.

The party said the measures that were introduced by Prime Minister Julia Gillard’s Labor government last year have stalled investment in the mining sector.

Australia has one of the world’s highest per capita levels of carbon emissions and the carbon tax were introduced with plans to transition to emissions trading from 2015, Reuters reported.

The carbon scheme, along with a 30 percent tax on iron ore and coal mining profits, have been criticized by mining companies, who say it damages competitiveness and employment as Australia's AAA-rated economy slows and China’s demand for minerals cools.

“Both the carbon tax and the mining tax are a drag on Australia's energy and resources sector and make investments less attractive than investments in other countries,” opposition resources spokesman Ian Macfarlane told a mining conference, Reuters reported.

Australian government data published in May said that A$150 billion ($139 billion) in planned resource projects had been delayed or cancelled since April 2012, as China’s economic slowdown weighs on decade-long mining boom.

But a new government forecast on June 26 predicted that the world’s biggest producer of iron ore would see a 14 percent rise in exports in the 2013-2014 fiscal year as the country’s big miners press ahead with multi-billion dollar expansions.

At the same mining conference in Canberra, Anglo American Chief Executive Mark Cutifani said that Australia had “wasted its mining boom” with ill-thought out taxes.

The mining tax has raised only A$126 million in its first six months.

A combination of falling commodity prices and lower mining profits has forced the government to slash its projected mining tax revenue to A$3.3 billion over the next four years, down on forecasts of A$13.4 billion made last year.

Even with a victory, the opposition face obstacles in trying to repeal the carbon and mining taxes in the upper house of parliament.

The influential Australian Greens, who wield the balance of power in the senate and who will remain a force as only half the upper house is up for re-election, have threatened to oppose attempts to repeal the carbon and mining taxes.



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