Share

Vote to scrap Aus super profits tax

Sydney - Australia's upper house Senate voted on Tuesday to scrap a tax on mining industry super profits, a major victory for conservative Prime Minister Tony Abbott that has fuelled accusations that he is in the pocket of global mining giants.

Abbott made abolishing the Mineral Resource Rent Tax (MRRT) one of the centre pieces of his campaign, but it has been stalled in the upper house alongside austere budget measures introduced in May to stave off what he has called a "budget crisis".

Although the repeal of the mining tax follows the successful scrapping of the controversial carbon tax earlier this year, it remains to be seen whether they signal a thaw in the hostile Senate, where his budget remains essentially frozen.

"The government has delivered on our commitment at both the 2010 and 2013 elections to scrap the failed Minerals Resource Rent Tax," Treasurer Joe Hockey and Finance Minister Mathias Cormann said in a joint statement.

"The tax package was so poorly designed, it was in fact costing the government billions of dollars each year."

The government says the repeal will take net savings forecast in the budget to more than A$10bn over the forward estimates, and passage in the lower house is seen as a formality when it comes up this week.

But while the repeal should signal a victory for Abbott by delivering some of the budget savings he promised earlier this year, it is unlikely to silence a growing chorus of critics who say he is weakening social and environmental protections.

"Instead of getting a fair share from the big end of town that can afford to pay, coal mining billionaire Clive Palmer has done a tricky deal and put the pressure back on workers and families," opposition Greens Party leader Senator Christine Milne said in a statement.

"Champagne corks will be popping in mining company boardrooms while Australian workers will face less money for their retirement."

Global miners with bases in Australia, such as BHP Billiton [JSE:BIL] and Rio Tinto have said the tax, and a carbon tax repealed by the government earlier this year, are out of step in the aftermath of a decade-long mining boom.

Under the Labour party, Australia slapped the "super profits" tax on producers of iron ore and coal - Australia's two most lucrative exports - despite fierce opposition from industry-funded lobby groups.

Those groups welcomed the repeal, arguing it was necessary in the light of a global cool-off in metals and coal prices that has removed much of the wind from the sails of the mining industry.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you think corruption-accused National Assembly Speaker Nosiviwe Mapisa-Nqakula will survive a motion of no confidence against her?
Please select an option Oops! Something went wrong, please try again later.
Results
No, her days are numbered
40% - 226 votes
Yes, the ANC caucus will protect her
60% - 339 votes
Vote
Rand - Dollar
19.00
-0.5%
Rand - Pound
24.02
-0.5%
Rand - Euro
20.51
-0.2%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.6%
Platinum
900.15
+0.4%
Palladium
1,000.00
-0.2%
Gold
2,210.45
+0.7%
Silver
24.60
-0.2%
Brent Crude
86.09
-0.2%
Top 40
68,142
+0.7%
All Share
74,329
+0.6%
Resource 10
56,957
+2.3%
Industrial 25
103,635
+0.4%
Financial 15
16,485
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE