Australia's new government a boost to mining industry?

Sept. 9, 2013 at 1:31 PM
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SYDNEY, Sept. 9 (UPI) -- Resource sector leaders in Australia applauded the election Saturday of Tony Abbott as the country's new prime minister.

Outgoing Prime Minister Kevin Rudd and his Australian Labor party lost Saturday's Australian general election to the Liberal National coalition by a wide margin.

"On the first sitting day of Parliament under a coalition government, I will introduce legislation to repeal the Carbon Tax," Abbott stated on the Liberal party's website, adding that the party would also rescind the country's Minerals Resource Rent Tax.

Both taxes went into effect in July 2012, under then-Prime Minister Julia Gillard's Labor government.

The 30 percent Mineral Resource Rent Tax, or MRRT, applies to profits of more than $67 million for iron ore and coal projects.

Under the carbon tax system, the country's top 500 polluters are charged $22 for each ton of carbon emitted into the atmosphere and it would have increased to about $23.40 next year. Australia is the world's highest per-capita carbon emitter among developed nations.

Rudd had announced in July that the government would drop the carbon tax and replace it with an emissions trading scheme beginning next July, a year sooner than had been planned.

Mitchell Hooke, chief executive of the Minerals Council of Australia, in a statement Sunday said that abolishing the carbon tax and the MRRT "will be a positive first step in an industry where our international competitors face no such comparable imposts."

Hooke noted that even before the introduction of the MRRT and carbon tax, Australia's minerals industry has paid an average effective tax rate in excess of 40 percent over the past decade. The carbon tax, he said, had been "a dead-weight on the economy" that has failed to achieve its environmental objective "while adding massive new costs on the minerals sector."

Hooke said the sector "looks forward to the coalition government refiring the engines of economic reform in Australia."

Repeal of the MRRT, Hooke said, would boost industry confidence and also "send a powerful signal that Australia is not about to relinquish its position as a premier destination for investment and a cost-competitive global supplier of minerals resources."

Australia is the world's fourth largest producer of coal.

"After ticking all the minerals and energy policy boxes during the election campaign, the newly elected Abbott government could look forward to strong support from the Queensland resources sector in implementing its agenda," Michael Roche, chief executive of the Queensland Resources Council, the representative body for coal mining companies in the Australian state, said in a statement Sunday.

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