Fortescue, Barnett Unite Against Mrrt
March 19th, 2012
FORTESCUE Metals Group confirms it has sought legal advice ahead of plans to mount a High Court challenge against the Federal Governments mining tax.
Legislation to impose a 30 per cent tax on the extraordinary profits of iron ore and coal miners passed the Senate last night.
Profits from the Minerals Resource Rent Tax (MRRT), estimated to be $10.6 billion in the next three years, will be used to help boost superannuation contributions and support tax cuts for small businesses.
A Fortescue spokesman confirmed today the company had engaged senior counsel and would "commence legal proceedings after the legislation has been enacted and legal opinion has been finalised".
"Good tax reform is broad based and simple. The Minerals Resource Rent Tax is neither," the spokesman said.
"Fortescue is not opposed to paying our fair share of taxes, but the MRRT is a poorly designed tax, drafted by the big miners behind closed doors to minimise their tax exposure at the expense of the rest of the industry.
"The MRRT is unfair, narrowly based, complex, inefficient, and will reduce investment and future jobs in the Australian mining industry."
Premier Colin Barnett said today he would be supportive of any High Court challenge that might be launched by others, and didn't rule out providing financial support.
The Association of Mining and Exploration Companies (AMEC) also said it would support any of its members - including Fortescue - that want to "entertain a constitutional challenge".
"We don't know what form it will take and we'll have a sit down with those members that are seriously going down this path and just see what each of our roles will be in the context of the constitutional challenge," AMEC chief executive Simon Bennison told PerthNow.
"That will also include looking at state governments, not specifically WA, and we would also just see how we can collaborate on a national front.
"Nothing is definitive at this point in time, we're still letting the dust settle and we've been communicating with FMG just to see what their approach is and that isn't clear at this stage."
The Chamber of Minerals and Energy (CME) and the Chamber of Commerce and Industry WA (CCIWA) slammed the mining tax today, saying it added an unnecessary burden to the industry.
"By introducing this new tax, the Federal Government is adding more costs to business in the growth areas of the WA and national economy, all at a time when Australian resources projects are competing for investment and markets in a tight globally competitive market," CCIWA chief executive James Pearson said.
Mr Pearson reiterated the MRRT was a "badly designed tax and should be repealed".
CME chief executive Reg Howard-Smith said the Prime Minister's last-minute deal to win Greens support for the tax brought further business uncertainty.
"While transparency of MRRT revenue collected is welcome, the resources sector does not want to see the goal posts shifted in six months time because of the Greens. This will lead to further uncertainty to a sector already facing increased challenges through the Carbon Tax," he said.
"Australia has been blessed with a natural resource endowment, but we are by no means unique. Minerals are found in abundance all over the world and the careful management of these resources should ensure our country continues to grow."
Mr Bennison said AMEC would sit with federal treasury this week to push for amendments in order to create a level playing field in relation to the application of the mining tax.
Greens Leader Bob Brown will also be pushing through his party's
proposed amendments, which include broadening the application of
the MRRT to other sectors, including gold and uranium.