Australia: Australia axes disputed mining tax
04 September 2014
Posted by: Author: SAPA
Australia's upper house on Tuesday agreed to scrap a contested resources profits tax after the government struck a surprise deal with crossbench senators, including mining billionaire Clive Palmer.
The Minerals Resource Rent Tax was introduced by the previous Labor administration in 2012, with a levy on annual profits above Aus$75 million (R751 million) on iron ore and coal at a rate of 30 percent.
It was intended to return a share of the spoils of Australia's decade-long mining boom to government coffers but was widely criticised after its revenues fell dramatically short of forecasts.
"The mining tax is now gone,” triumphant Treasurer Joe Hockey told parliament after the Senate voted 36 to 33 for its repeal, a key election promise of the Tony Abbott-led conservatives.
"We said we'd get rid of the mining tax; we've delivered in full.”
Scrapping the tax was made possible after the government did a deal with minor parties led by the Palmer United Party, whose powerbroker leader is a coal magnate.
Palmer always wanted the tax gone but said he would not support a repeal unless crucial initiatives to assist families - which were threatened by budget cuts - were left unchanged.
A compromise was reached.
Greens party leader Christine Milne said the deal was a win for the big miners and for the flamboyant Palmer, who last month issued an apology after outraging Beijing by calling China's leaders "mongrels” who "shoot their own people”.
"If ever there is a conflict of interest, it is this one,” she told the Senate.
"How is it possible that you can have a coal billionaire voting to vote down a mining tax?”
Palmer insisted the move made no difference to his coal mining interests in Queensland, saying he was "retired” and was no longer chairman of any company.
"We all pay tax. Does that mean that members of parliament don't vote on income tax bills?” he told reporters.
Dumping the tax was a major win for Abbott.
It follows his victory in July when he succeeded in abolishing a divisive carbon levy after years of vexed political debate.
This article first appeared on iol.co.za.