Senate debates

Monday, 9 December 2013

Questions without Notice


2:35 pm

Photo of Arthur SinodinosArthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Hansard source

I sometimes still struggle with 'Sinodinos' as well! Mr President, the mining tax was a poorly designed tax which burdened the industry with excessive compliance costs, making an investment in Australia's minerals sector less attractive globally. It was a poorly designed tax on Australian mining companies that discouraged investment by imposing higher taxation on ventures that involved risk taking. It was meant to be a resource rent tax, which means it was meant to extract profits without affecting production, but in fact the way it was originally designed meant it was imposing higher tax on ventures that involve risk taking. The MRRT damaged international investor confidence in Australia, and in particular the energy and resources sector, by making the sector less competitive internationally. The AMEC, the Association of Mining and Exploration Companies, stated:

Since the announcement of the RSPT—

the original resource super profits tax—

and MRRT in 2010, Australia’s reputation has been tarnished and industry confidence has floundered.

The repeal will go a long way to restoring confidence and much needed investment back into the mining industry.

The tax added a new administrative layer of complexity. It imposed a significant compliance burden on miners, even for the hundreds of companies that would never have a tax liability. As AMEC recently told the Senate Economics Legislation Committee:

… minimum total set-up costs in the first year of smaller iron ore and coal miners and junior exploration companies, excluding large miners, was estimated to be over $20 million and ongoing administration and compliance costs in excess of $2 million.

The managing director of Atlas Iron said in October last year:

We have spent the best part of $2m in compliance to find that we are not paying the tax …

The mining tax has already cost over $50 million in administration and yet only raised $400 million. The repeal of this tax will provide a boost for the mining industry. (Time expired)


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