#ausvotes

Coalition Mining Tax Policy

• Summary

  The LNP are against the mining tax and favour broadening the tax base and allowing participants within the economy the incentive to work, to risk capital, and to be rewarded for their initiatives and innovation.

  
  

  More

  Essentially the Liberal National Party favour the broadening of the tax base and are adamantly against any type of mining tax as in their view, miners already pay for the privilege of extracting Australia’s resources through the royalty scheme. For the Coalition, a mining tax will only dampen investment in the mining industry by forcing projects offshore to for example, alternative locations such as Canada, South America or South Africa. The mining industry in the view of the Coalition is the heart of the Australian economy and the driving force behind its prosperity and resilience, the most productive industry in Australia; they simply do not want to threaten investment in the mining industry due to such a tax burden. The mining industry they claim, provides so many of Australia’s essentials such as road & building materials, agricultural prices and numerous industries associated with mining along the supply chain, that inflation & unemployment will also be subject to upward pressure.

  
  

  Foreign investment demands political stability in order to engage in calculated investment risk, and a reliable tax regime is essential to attract offshore investment. In addition to the political instability that this tax presents the subsequent pressure on the local labour market is something the Coalition seek to avoid, along with the alleged demise of small business and many local communities surrounding mining operations. Almost paradoxically, under an implicit financial arrangement, Indigenous communities in North Queensland have also expressed concern for their income should the mining corporations leave their local area. The Coalition see themselves as a party that reduces taxes and adopts more fiscally responsible spending initiatives, citing as an example the initiative to replace numerous associated taxes into one simple tax in the form of the GST. Indeed the Coalition claim that at the time the GST was introduced that they had condensed the number of Federal taxes into a modest 99, and the proposed mining tax would now take the number of Federal taxes imposed to 100. The Coalition largely subscribe to a smaller role played by government, allowing market forces within an expanding economy to reward participants. They claim that the intrusion of the mining tax upon investment in the mining industry is tantamount to a nationalisation of the industry.

  
  

  The Coalition state that the bond rate or 6% threshold most certainly didn’t reflect the risk miners were taking by investment in our mining industry as the same return is largely available through relatively low risk banking institutions. They remain averse to the tax despite negotiation of this threshold to the bond rate plus 7% (and $50m), stating that this still limits the potential of smaller operators to succeed in the industry.

  
  

  Recently the Coalition has questioned the validity of the government’s Budget and claim that concessions in negotiating the MRRT are far greater than $1.5. They cite the fact that the MRRT applies to a mere 300 mines, whereas its predecessor the RSPT applied to 2500 mines. Particularly noteworthy to the Coalition was the fact that the government revised its forward estimates by amending forecasted resources prices. This type of modelling in their view lack credibility and is a convenient attempt to give efficacy to a failing Budget immediately prior to the Election. In their view this sort of conduct by the government is a precursor to subsequent increases in the MRRT headline rate, as attempts to reduce the Budget deficit fail in the very near future.