Opposition Leader Tony Abbott says he cannot see how the Coalition could back the Government’s move to put a 40 per cent tax on mining profits.
Mr Abbott has given his strongest indication so far that the Opposition will block the tax after meeting with senior mining executives in Canberra today.
Mr Abbott has been speaking with BHP Billiton executive Marius Kloppers and Rio Tinto Australia managing director David Peever in Canberra as Prime Minister Kevin Rudd held a series of meetings with mining heavyweights in Perth.
The Government’s announcement on Sunday that it would impose a tax on the above-normal profits of mining companies has been met with outrage from the resources sector and has seen mining stocks plunge.
Emerging from today’s meeting, Mr Abbott said he could see “no way” the Coalition could support the tax.
“I reiterate that I can see no good arguments for this great big new tax,” he said.
“It is a very, very bad tax. The only way to avoid it is to ensure there is a change of government at the next election.”
Overnight London-listed shares in BHP Billiton shed nearly 8 per cent and Rio Tinto shares dropped more than 6 per cent.
The Government has accused the mining industry of running a scare campaign and Mr Rudd has indicated he will not budge from the 40 per cent rate.
“It’s inevitable that mining companies are going to complain,” he said.
“We intend through an extended consultation process to work our way through it.
“A whole range of points of view were put [forward today]. We’ll try and work through the detail of that.”
Greens Leader Bob Brown has urged the Government to stick to its guns.
“The mining corporations have far too much say in the running of this country without being representative, they are a massive lobby on both parties in Canberra,” he said.
“They have the Coalition on a string, but this Labor Government, which stands up for average Australians, should stay strong on what is a proper idea.”
‘Heavy-handed’ tax
Mincor Resources managing director David Moore says the tax will have dire consequences for the industry.
“We can only hope and pray that through the consultation process there’s is a sense returned to how this tax is applied, and hopefully the tax goes away altogether,” he said.
Toro Energy managing director Greg Hall says his company may have to reconsider at least one project.
“We’re evaluating our project in Western Australia on the basis of this additional tax regime and determining what that means for us,” he said.
WA Premier Colin Barnett says the tax should be dropped or scaled back.
“This is very heavy-handed,” he said.
Meanwhile, Canadian finance minister Jim Flaherty says the new tax could benefit his country because investors will seek places to invest that have lower taxes.