Page 147 - Minesite 2011

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While the MRRT represents progress compared to the
original Resources Super Profits Tax, the fact remains there
has been no streamlining of resources taxes, but an additional
layer of tax added instead.
Central to its concerns, CMEmaintains the implementation
of the MRRT must not adversely impact the Australian
minerals and energy sector’s international competitiveness.
The complexity of the tax and the administrative
compliance burden this will place on junior and start up
operations is also a concern. While the draft legislation
provides a simplified compliance method, operation of the
method is too punitive and would discourage most taxpayers
in adopting the option.
CME continues to oppose the introduction of the
MRRT until the full impact of the proposed changes is
fully understood.
In July, the much-debated Carbon Tax was revealed
by the federal government, and appears to do nothing
to reduce carbon emissions but instead places another
cost on the resources sector and reduces its international
competitiveness.
At $23 per tonne the government tells us around 500
companies will be paying for their emissions. However, the
resources sector will be subject to an equivalent carbon price
for off road transport fuel via a reduction in fuel tax credits,
a cost that will affect around 1,800 mine sites.
Interestingly, the major industries of agriculture, forestry
and fishing are immune from this increase until after the next
federal election. At that time, the reduction of fuel rebates will
impact on (or hit) heavy road users, meaning that a vast range
of daily food items and consumer goods will go up in price.
CME members are telling us that at 6 cents per litre, the
tax on fuel could add tens of millions of dollars to their tax
liabilities. This is a significant cost impost and will drive up
the total cost of developing projects in the state. It also adds
another layer of discomfort to an industry battling with the
looming MRRT.
The imposition of the carbon tax questions the federal
government’s understanding of what is actually driving
our economy.
While coal has received some compensation, it is baffling
that natural gas, which has half the greenhouse emissions of
coal and is seen as a vital transition energy source, has not
received any transitional assistance.
The market in WA has long been supported by a range of
energy sources and it is important that diversity continues;
however, the proposed measures will increase the cost of
domestic gas to the families of WA and also to industry.
It is in Australia’s best interests that the resources sector
remains strong; however, the shadow of these taxes has
made the international playing field uneven, with Australia
becoming a less attractive place to invest.
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Central to its concerns, CME maintains
the implementation of the MRRT must not
adversely impact the Australian minerals and
energy sector’s international competitiveness.
The complexity of the tax and the administrative
compliance burden this will place on junior
and start up operations is also a concern.