Labor axes carbon price tax cuts

Labor’s carbon package is in tatters, with $1.4 billion of tax cuts scheduled for 2015 to be dumped in next Tuesday’s budget, and cuts to clean energy initiatives, because a slump in the European carbon price has forced Treasury to halve the revenue expected from the sale of carbon permits, according to the Australian Financial Review.

The dumping, or indefinite deferral, of a second round of tax cuts that were supposed to be funded by the carbon price will damage Labor’s attack on the Coalition over its plans to repeal all spending measures associated with the government’s clean energy package, and all but one of the measures associated with the mining tax.

The government had previously ruled out dumping the 2015 tax cuts. But confronted by a yawning revenue chasm as the high dollar hits company profits and forecast company tax payments, Labor has been forced to axe spending and tax cuts to help present a credible last budget before the election.

Expanding mines may help Rio Tinto cut $US3B, says Deutsche

Rio Tinto could cut up to $US3 billion from the remaining spending on a planned iron ore expansion to 360 million tonnes by expanding existing mines rather than building new ones, says Deutsche Bank, according to the Australian Financial Review.

Rio chief executive Sam Walsh told analysts on Monday the miner was highly likely to approve the iron ore mine expansion when it was put to the board in the fourth quarter.

Deutsche Bank analyst Paul Young said the capital cost of the mine expansion could be reduced to $US2 billion if Rio chose to expand existing mines by 70 million tonnes rather than construct new ones.

Labor MP wants mining tax burden eased

A member of Prime Minister Julia Gillard's government has called for changes to the minerals resource rent tax, after accusing it of placing too much of a burden on small miners, according to the Sydney Morning Herald.

Just hours after revenue projections from the tax were more than halved from $2 billion to $800 million, WA Labor senator Mark Bishop said the tax should be altered to lessen the impact on small miners whose profits are below the $75 million eligibility threshold.

Despite not paying the tax, such miners are still paying compliance costs under rules that force them to reveal information to the Tax Office in case they become profitable enough to qualify for the tax in the future.