THE Federal Government's plan for a 40 per cent mining super tax is a big revenue grab, not taxation reform, says the industry's peak body, the Minerals Council of Australia.
"It's an unprecedented double-tax that will hit the industry's workforce, millions of Australians with shares in superannuation or minerals companies and the thousands of small and regional businesses servicing the industry," said Minerals Council chief executive, Mitch Hooke.
He said in the rush to extract more than the $25 billion already paid to governments in taxes and royalties, the Commonwealth had overlooked the stifling effects of this new tax on the minerals industry.
Secondary impacts could well mean less taxation revenue from mining for future generations to bank on.
"If the Government's new tax proposal goes ahead, $108 billion worth of future investment in the minerals industry will be under a cloud and Australia will have the highest taxed mining industry in the world," he said.
But general manager of Central Tablelands gold miner, Cadia Valley Operations, Craig Jones said there would be a consultation period before the proposed tax began in 2012-2013 and there was still detail to be determined before getting fearful of its implications.
"We have made a commitment to this community and we are sticking with it," he said, insisting construction had already begun on the new Cadia East mine.
But apart from scaring many valuable mining jobs away from regional Australia, Nationals Senator and Opposition spokesman on regional development, Barnaby Joyce, is worried the new super tax may also encourage miners to look closer at digging up more prime agricultural areas.
"If their profit options are restricted coal miners will obviously look at areas where it's easiest to get to the resource and overburden volumes are lowest - that's likely to be some of our prime rural land," Senator Joyce said.
He is also doubtful about the promised Federal Government reinvestment of $700 million a year to improve infrastructure in mining States.
"First of all $700 million represents only about two kilometres of road tunnel or very little in terms of railway line construction, and there's no assurance the money will be spent in the regions where mining occurs," he said.
Western Australian mining company Alkane Resources managing director, Ian Chalmers, was unsure if the proposed tax would make a difference to two western NSW projects worth $240m being considered by his company.
"I've found very few people that can actually tell me how it's going to work," he said.
"It looks like a political manoeuvre aimed at generating votes in the two big population centres," Mr Chalmers said.
Alkane is looking at developing a new $90m gold project at Tomingley and a $150m Dubbo Zirconia mine.
"I genuinely don't know how the tax might be be implemented. What is a super profit, and how is that determined," Mr Chalmers said.
"You don't whack an industry that has kept the country afloat for the last two years just because you think we're out of the woods."
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