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Resource industries to suffer increased company tax



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MEDIA RELEASE MEDIA RELEASE I Peter McGauran MP Shadow Minister for Resources and Energy

RESOURCE INDUSTRIES TO SUFFER INCREASED COMPANY TAX

The increase in company tax from 33 to 36 cents announced in the Budget will damage the international competitiveness of our strongest export industries.

Federal Shadow Minister for Resources and Energy, Peter McGauran MP, said the rise in the tax rate corresponds to an increase in the company tax bill for mining companies of over 8% or $90m across Australia.

'The increased tax burden will increase the economic cut-off grade for all minerals, affecting profitability, new investment and future production."

"For companies operating marginal mines, this tax increase may mean closure of those mines, significantly affecting the vitality of the industry and with a huge social cost in the communities affected."

"By increasing company tax, the Government will further erode the present level of exports and employment in the resources industry, on which Australia depends vitally for its standard of living."

"Direct employment in the mining industry comprises 90,000 people, with another 400,000 manufacturing and service jobs dependent on mining. Also, mining contributes over 50% of our merchandise exports with a level of $30b in mineral exports annually."

'The additional company tax burden will mean less money to be reinvested in exploration - eroding the future contribution the resource industries can make to Australia."

"A competitive investment regime is vital to the continued existence of our essential resource exports, since we are competing directly against mines in other countries with lower cost structures."

"Adding $90m to the cost of mining in Australia will not foster the fortunes of our most important export industry", Mr McGauran concluded.

For further information, contact: Peter McGauran 06-277 4363 09.05.95