The budget, handed down last night, confirmed the government’s commitment to the resource super-profits tax with revenue projections from the $A9 billion tax built into the entire budgetary forecast for the next three years and, according to the government, will bring the budget back into surplus in 2012-13.

In a statement, MCA deputy chief executive Brendan Pearson said the budget papers showed the government had locked-in the key features of its super tax on mining, including the 40% rate, the definition of profit and other critical, but flawed, design elements.

“This raises the obvious question: what is the purpose of the government’s consultation process for the super tax?” he said.

“If the key design features of the super tax are locked in, the consultation appears to be little more than window dressing.

“There can be no consultation or negotiation over the design of the tax if the main elements of the super tax are not on the table.”

The Resource Tax Consultation Panel is meeting with the MCA, other industry groups and individual companies including Fortescue Metals Group to discuss the federal government’s proposed 40% tax on resource profits.

Pearson also said the return to surplus by 2013-14, three years ahead of schedule, was built largely on the higher Commonwealth revenues from higher commodity prices.

“The budget shows the mining industry is already delivering strong dividends for Australia and there is no need for a new tax, especially one set so high that it threatens the competitiveness of Australia’s most important export sector,” he said.

He said new business investment was expected to recover strongly over the three-year period “led by a surge in mining investment” which is expected to grow by 7% in 2010-11 and 12.5% in 2011-12.

However, Pearson reiterated that the super tax threatened Australia’s mining-led growth story.

“The taxes (both royalties and corporate tax payments) have bolstered commonwealth and state revenues, the profits have been re-invested to underpin new mine and infrastructure expansions, strong jobs growth has strengthened and revitalised regional communities, while suppliers and service providers have seen their businesses in all states and territories expand to cater for a growing industry,” he said.

“But the new tax on mining jeopardises that growth story. Tax rates at 57 per cent will put a handbrake on industry growth that will slow investment, reduce new job opportunities and weaken export growth.”

Skills Training

Meanwhile, the MCA welcomed the $661 million for skills training.

"The $661 million training and education package will help underpin business in their effort to create a more skilled workforce," Pearson said.

"Minerals companies are committed to training, and government co-investment of 50 per cent of the costs of training (up to 90 per cent for small firms) will help deliver on that commitment."

Pearson said the estimated 39,000 training places, as well as the Numeracy, Literacy and language course for 140,000 Australians would help improve productivity.