Follow up on the article in the Mercury Tasmania newspaper;
By staff writers and wires
May 3, 2010 4:26pm
MINING shares close sharply lower on Government's announcement of new 40 per cent super tax.
The government announced yesterday it planned to impose the tax on "super profits", as mining giants such as BHP Billiton and Rio Tinto reap the benefits of an Asia-driven commodities boom.
BHP Billiton closed 3 per cent lower on the news to $39.53 and Rio Tinto closed 4.3 per cent to $69.
Macarthur Coal closed 10 per cent lower at $14.00, while the share market overall closed down just 0.6 per cent.
Prime Minister Kevin Rudd defended the proposed tax as a fair redistribution of income from the country's natural assets.
"Resource profits were over $80 billion higher over the last decade, but the Australian people only received an additional $9 billion," he said.
Noting that both BHP and Rio have hefty foreign ownership, Mr Rudd said "it's time for the Australian people... to get a fairer share of the natural wealth of this country, which ultimately is owned by all Australians".
The miners argue they already pay significant taxes.
The new tax will "result in significant and disproportionate additional taxation on the industry and could well curb the large-scale, long-term investments required to develop Australia's natural resources," Anglo-Swiss mining company Xstrata said.
Under the proposal, which has to be approved by parliament, companies exploiting non-renewable resources would have to pay a 40 per cent tax on extraordinary profits above capital returns from July 2012.
The Queensland Resources Council, an industry group, said the tax placed planned mining projects worth more than $100 billion in the state at risk.
"The worry is that if the Federal Government gets the design and implementation arrangements badly wrong, the risk is that many of those $100 billion worth of projects waiting a final go-ahead will not happen," the council's chief executive Michael Roche told ABC Radio.
"Instead they'll happen elsewhere -- in Africa, Asia or South America."
-With AFP
