In a major victory for Prime Minister Julia Gillard’s minority government, Australia’s parliament passed laws for a new 30% tax on iron ore and coal mine profits on Monday, ending a two-year battle with mining companies.
CANBERRA (Reuters) – Australia’s parliament passed laws for a new 30 percent tax on iron ore and coal mine profits on Monday after a bruising two-year battle with mining companies, in a major victory for Prime Minister Julia Gillard and her struggling minority government.
The tax will affect about 30 companies, including global miners BHP Billiton, Rio Tinto and Xstrata, and aims to raise about A$10.6 billion ($11.2 billion) in its first three years. “This is indeed an historic day for economic reform, and an historic day for a fair go in Australia,” Treasurer Wayne Swan told parliament.
The tax, which is being closely watched by other resource-rich countries, is designed to spread the benefits of Australia’s resources boom to other sections of the economy by funding a cut in the company tax rate, higher payments into pension funds, and A$6 billion of infrastructure spending.
The bills also include measures to lift gradually compulsory employer payments into worker pension funds from nine percent to 12 percent by mid-2019.
The laws passed through the upper house Senate with support from the Greens, who unsuccessfully tried to increase the tax rate to 40 percent and extend it to gold and uranium miners.
The Association of Mining and Exploration Companies, which represents small and mid-tier miners, condemned the tax.
“The tax is simply unfair to smaller emerging miners, and is so complex that the administrative and compliance burden on industry and government will be extreme,” association chief executive Simon Bennison said.
“The introduction of this anti-competitive legislation in Australia will only further push investment capital offshore, and change our reputation as a safe place in which to invest.”
OPPOSITION VOW
The government announced the original mining tax in May 2010, sparking an angry reaction from miners who ran an advertising campaign against it.
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