Bloomberg News

Australia Says Mining Tax Laws to Match Deal With Industry

October 25, 2011

(Updates with comment from Treasury in second paragraph.)

Oct. 25 (Bloomberg) -- Australia plans to introduce mining tax legislation to parliament before the end of the year that will match its accord with the industry, the Treasury said.

“The government has consulted extensively with industry and other stakeholders as it goes about implementing” the tax, Treasury said today in an e-mailed response to questions by Bloomberg. The legislation “implements the agreement struck with the mining industry,” it said.

The government is facing a dispute with the resources industry, which is concerned the latest draft will increase the revenue the government collects in the early years of the levy, the Australian Financial Review reported today. Treasury is reconsidering its approach to depreciation, the newspaper said, citing unnamed people close to the talks.

Australia plans to introduce the 30 percent tax on profit from coal and iron ore at companies including BHP Billiton Ltd. and Rio Tinto Group. The tax, forecast to raise A$7.7 billion ($8.1 billion) in its first two years from July 2012, will be used to lower the corporate tax rate to 29 percent from 30 percent, encourage retirement savings and pay for roads and railways, the government has said.

“We will deliver the agreement that I entered into with the biggest mining companies in the middle of last year,” Prime Minister Julia Gillard told Australian Broadcasting Corp. radio in Perth. “I’ve deliberately taken the approach here that we wanted to work every step of the way in consultation with the mining industry, and we’re continuing to do that in what has been a very, very constructive set of engagements.”

Kelly Quirke, a spokeswoman for BHP, declined to comment on mining tax talks.

--Editors: Keith Gosman, Indranil Ghosh

To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net


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