MINING TAX ALSO A LOCAL ISSUE
June 7, 2010
The Rudd Labor Government proposed new tax on mining is not just an issue for resource rich states likes Western Australia and Queensland.
If this new tax is introduced the impact will be felt on a wide range of industries in Gippsland which support the mining sector along with the negative impact on the income of self-funded retirees.
The Opposition Parties are strongly opposing the so-called Super Profits Tax for several reasons.
To begin with, it doesn’t make sense to target the mining sector at a time when there is a great deal of global economic uncertainty.
It’s important to remember that money can move quickly between projects and if mining companies believe they can achieve a better return elsewhere in the world, investment in Australian projects will be diminished.
The flow on impacts for smaller companies in Gippsland which often provide services to the mining industry will result in less opportunities for skilled workers and apprentices.
Another alarming aspect of the tax is a decision to make it retrospective.
When you consider that mining companies are long-term investments with some projects taking 10 and 20 years to return profits it is counterproductive to apply a new tax on existing operations.
Australia has always been regarded as a stable country for major investment but several key players in the mining industry are now raising the question of sovereign risk when they consider their future plans to invest in our region.
In its sometimes personal attacks on mining executives the Rudd Government has adopted a class warfare approach and failed to recognise that millions of Australians already benefit from the mining sector thought their share portfolios and superannuation funds.
Self-funded retirees have already seen their income diminish by the global financial crisis and the current drop in share prices which is related to the new tax is another reason why Kevin Rudd’s plans should be strongly opposed.
Perhaps the most alarming aspect of this whole issue is the way it has been mismanaged by Senior Labor Ministers.
It is appalling that the government is now spending $38 million on a taxpayer funded advertising campaign to vilify the mining industry and try to convince voters to support the new tax.
Kevin Rudd promised to give the Auditor-General more power to prevent such government propaganda campaigns and it’s about time all sides of politics signed up to prevent any future waste of taxpayer money.