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Zero for the MRRT and a fail for tax-grabbing Gillard Government



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Ian Macfarlane MP

Shadow Minister for Energy & Resources Federal Member for Groom

MEDIA INQUIRIES: KYLIE BARRON 07 4632 4144 0413 229 957 kylie.barron@aph.gov.au - www.ianmacfarlanemp.com

House of Representatives Parliament of Australia

25 October 2012 Ref: 02212

ZERO FOR THE MRRT AND A FAIL FOR TAX-GRABBING GILLARD GOVERNMENT

Revelations that the Gillard Government has received no revenue from the mining tax in its first quarter have exposed the utter folly of the Government’s tax grab on the mining sector, which has compromised Australia’s international reputation and sovereign risk profile and imposed new red tape and regulations, all for nothing.

Shadow Minister for Energy and Resources Ian Macfarlane said despite the Government’s increasingly weak insistence that the Minerals Resource Rent Tax (MRRT) would prop up Wayne Swan’s flimsy surplus, the figures reveal the consequences of a flawed tax grab on the mining sector.

“The MRRT has been a disaster from the outset,” Mr Macfarlane said.

“Despite being little more than a pre-election fix to a political headache caused by the equally as disastrous RSPT, and a desperate attempt to patch up Labor’s budget black holes, the mining sector is still paying the price of Julia Gillard and Wayne Swan’s tax grab.

“Regardless of how much, or any, MRRT is paid, mining companies have incurred millions of dollars in compliance and accounting costs and have to deal with new layers of red tape.

“As the Coalition has warned all along, the Gillard Government has also undermined the long term integrity of the budget and built in the possibility of a structural deficit because the MRRT revenue predictions rely on fixed forecasts for commodity prices and the value of the Australian dollar - two constantly fluctuating variables.”

Earlier this month the head of Rio Tinto, Tom Albanese, warned of that volatility when he said:

‘You can have fairly modest changes in underlying commodities, having large changes in the amount of payment under the MRRT. Of course, we've had anything but modest changes in pricing over the last couple of months and that will play into what's due.’ (Rio cuts forecast for China growth, The Australian, 10-10-12)

While Paul Young of Deutsche Bank said:

‘There are so many moving parts in this tax, and so many assumptions about company profits, carrying values and prices, it is near impossible to predict what instalments will be made and what future MRRT will be on an industry wide basis.’ (BHP, Rio opt for first mine tax hit, The Australian, 18-10-12)

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Media release from the Hon. Ian Macfarlane MP — Member for Groom Page 2

“But this Government has never been interested in facing the realities of the resources sector or consulting with the industry before it imposes its spur of the moment decisions, especially given just a couple of months ago Ministers couldn’t even agree whether the mining boom was on or over,” Mr Macfarlane said.

“The bottom line is that the Gillard Government has compromised Australia’s international reputation and has sent a clear signal to investors that it changes the rules on a whim whenever it needs to cover its budget black holes, for the sake of a tax grab that has so far delivered nothing.

“The Gillard Government simply doesn’t understand the energy and resources sector. It sees the industry as little more than a cash cow.

“The Australian economy relies on revenue from a strong resources sector, and tens of thousands of Australians rely on it for their jobs.

“Australia can’t afford another bungle from a Government that is more interested in taxing the resources sector for political gain, instead of putting in place policies to ensure its long term future.”