Australia's mid-tier miners and explorers recommence Canberra tax bash

As elections loom, the organisation representing small and medium-sized miners and explorers has decided to restart its advertising campaign against a proposed mining tax

PERTH - - - 

The Association of Mining & Exploration Companies (AMEC) angered by the so-called negotiated settlement the Gillard Government claimed it had reached with "the mining industry" has decided re-launch its vigorous attack against what it sees as a damaging new tax.

AMEC's chief executive Simon Bennison said: "In a gesture of good faith we ceased our media campaign in June against the Government`s proposed new mining tax, however, the time has now come to re-launch our campaign. 

"The Prime Minister said that the Government was going to open the doors to the mining industry and asked the industry to do the same.

"However, all that has happened is a secret deal has been done with three multi-national mining companies, to the exclusion of 99% of the industry, with the result that only a two page document has been produced which lists the general principles for a new mining tax.

"If the Prime Minister thinks that the mining tax issue is dead and buried, she is wrong.

"We have unsuccessfully sought to meet with the Prime Minister, Deputy Prime Minister (Wayne Swan) and the Minister for Resources (Martin Ferguson) on several occasions over the past few weeks, and finally had a brief meeting with Minister Ferguson today.

"We have attempted to pose a number of questions and concerns raised by our mid cap mining and junior explorer members that need to be addressed by the Government.

These concerns, he said, need to be answered now, and not put into a Committee process which is not expected to go through until December.

"In the absence of any detail, we seek to have the proposed mining tax withdrawn until full and transparent industry consultation has occurred."

Issues that concern AMEC members include:

·         The significant uncertainty and confusion that has been created in investment and capital markets and in the business decision making processes.

·         The tax is a disincentive to investment and will significantly reduce Australia`s prosperity and affect the economy with the result that jobs will be lost.

• Australia`s international credibility and competitiveness has been reduced, and sovereign risk severely affected.
• The goal posts will move as a result of the Greens political pressure (which may end up with the balance of power in the Senate), and a possible budget shortfall.
• The tax is unfair, unjust, poorly designed, complex, inefficient and discriminatory.
• The tax does not promote minerals exploration, project development or economic growth.

 AMEC said it has been provided a mandate to re-commence a national multi media advertising campaign.

"As every day passes the level of uncertainty and confusion increases, with the result that Australia`s economy, communities and families will be affected", said Bennison.

The campaign that AMEC ran when the more severe resource super profit tax was proposed by then Prime Minister Kevin Rudd and Treasurer Swan was so effective that it (and a media campaign also waged by the Mineral Council of Australia (MCA)) threatened to dethrone several sitting Labor members in the looming election.

This unpopular tax proposal, which triggered a flight of capital out of Australia, was a key factor behind a palace coup that saw Rudd ousted from leader of the ruling party and his deputy Julia Gillard handed the crown.

However, soon after the new regime began private talks began with BHP Billiton, Rio Tinto and Xstrata to come to an agreement on the less draconian RRT which was to apply only to major iron ore and coal projects. This is seen as having the potential to be open ended and another tax that will have only one course - north.

While that satisfied the MCA which represents the big end of mining in Australia, it left AMEC and several companies angry, including Fortescue Metals Group which is the big new iron ore miner in Western Australia's Pilbara as a major competitor to BHP and Rio Tinto.

Will the AMEC campaign have an impact, without the big money utilised by the MCA?

The change from Rudd to Gillard transformed the new Government from a likely loser to a possible winner in the coming election.

However, while Australia's first female Prime Minister is currently enjoying somewhat of a honeymoon period-- helped by the political pundits suggesting she is going to get a high womens' vote -- there are a few chinks appearing, and it's noticeable in non urban seats in Queensland where mining is a factor.

The much touted televised debate between Gillard and Liberal Opposition Leader Tony Abbott last night was not the anticipated clean sweep for the Prime Minister.

This morning's Newspoll suggested that the big lead Gillard had on being elected has been cut back, with her personal choice as leader now down to 50% and the party holding a now much more slender lead that may well need the preference votes of the Greens - who want more taxes on mining.

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gold and silver W************************** by grabher on July 26 2010, 12:22 Find this comment inappropriate? Report it

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