Mineralogy chairman Clive Palmer’s reasoning, as he shared with MiningNews.net and Australia’s Mining Monthly’ co-hosted round table on the MRRT, is that there are some charities out there that would make better use of the revenue than the government ever would.
That way, he said, the miner could claim a full deduction for the amount it would have been taxed in MRRT.
In many ways Palmer’s suggestion makes as much sense as the process the government has taken to setting this tax up.
It announced Thursday that it would be taking on the full 98 recommendations suggested by the Policy Transition Group that had been led by former BHP Billiton chairman Don Argus.
The general consensus from the round table panel was that those recommendations only made a bad tax slightly better. The panel comprised, besides Palmer, Senator Mathias Cormann, Pitcher Partners associate director Leon Mok, Association of Mining and Exploration Companies chief executive Simon Bennison and Chamber of Minerals and Energy WA director Damien Callachor.
Fortescue Metals Group chief executive officer Andrew Forrest, who had been invited to attend but was unable to due to other commitments, gave his own view on the government’s latest MRRT move.
Speaking on the sidelines of the Credit Suisse Asian Investment Conference in Hong Kong, Forrest raised concerns the tax, which was designed by BHP Billiton, Rio Tinto and Xstrata, remained unfair and that Don Argus’ role as chairman of the Policy Transition Group was “amusing” considering his former position as BHP chairman.
“It’s a precedent that should not be supported. Taxation policy should be broad-ranging, it should be fair and it should be based on the [idea] of being equal among states and equal among companies,”The Australian quoted Forrest as saying.
Forrest went on to say BHP, Xstrata and Rio would not be paying the bulk of the tax, which instead would be borne by Australia’s junior mining sector.
“It will be the new companies, the new developers who are the future of the economy that you want to encourage,” he said. “It is unhealthy and unprecedented and should not be supported.”
Another issue that kept bubbling up throughout discussion was the role of the big three miners BHP Billiton, Rio Tinto and Xstrata in the MRRT’s framing.
Colourful as ever, Palmer had some pretty direct comments to make about it.
“It would have been called corruption in any other country where three foreign miners did a deal with the government,” he said.
“Their plan was obvious – to put impediments in the way of their competitors doing development.”
Mok agreed with Palmer’s view, saying that conclusion was “pretty obvious in the design of the tax”
Bennison admitted the tax proponents had been very clever with the way they had constructed the MRRT.
He was one of those at the forefront of the opposition to the resources super-profits tax that preceded the MRRT. Indeed, the campaign that AMEC helped put together was successful in part because it removed one prime minister and derailed what was a hugely unpopular tax.
Unfortunately it did not get rid of the root problem and the tax returned in its MRRT guise.
“Divide and conquer,” Bennison said. “They [the government] split the industry successfully.”
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