National Media Releases

Labor must come clean on mining rent tax - Senator the Hon Nick Minchin

27th January 2010

The Rudd Government needs to quickly confirm or deny that it plans to impose a massive new rent tax on the mining sector to bolster Commonwealth coffers by billions of dollars, Shadow Minister for Resources and Energy Senator Nick Minchin said today.

There is growing unease among the resources sector regarding strategic leaks from the Henry Tax Review about the prospect of the Rudd Government imposing a 40 per cent national rent tax on it, as reported in today’s Australian Financial Review.

The new rent tax, akin to the existing Petroleum Resource Rent Tax, would reportedly replace state royalty taxes and add billions of dollars to Federal Government coffers.

Senator Minchin said the Rudd Government must end the speculation regarding this significant issue, in order to provide certainty to the resources sector.

“Quite rightly, there are concerns both here and abroad that a new imposition such as this could put at risk new investment. It would appear that the Rudd Government is eying off the resources sector as a giant cash cow to offset against the mountains of debt it is racking up.”

The Western Australian State Government has also raised serious concerns about any plans to kill off the state-based royalty systems in favour of a tax collection regime centralised in Canberra.

“Resources Minister Martin Ferguson is remaining coy about the plans, but reportedly said the Government ‘can manage changes in taxation, but we can’t manage speculation’,” Senator Minchin said.

“What the Rudd Government can do is quickly end the speculation by coming clean and confirming whether or not it will be imposing this new rent tax. If so it needs to explain the ramifications this new regime will have on the resources sector and also State Governments which rely on mining royalties.

“The Henry Tax Review has sparked widespread speculation and uncertainty and the Rudd Government should respond to the Coalition’s calls to release it, so the speculation can end,” Senator Minchin said.