Australian Mineral Rent Resource Tax

Emerson’s Dan Nower, a member of the Machinery Health Management team, looks at the impact of changing tax rates on Australian miners.

At first look, the 30% tax that the Australian government is about to impose looks bad. In fact, my first thought was, “What is the Aussie Government doing? They are going to bring the Australian economy to a screeching halt! After all, it was the mining industry that minimized the effects of the global recession in Australia, right?” A more in depth look revealed another point of view and some concern, depending upon if you were in the Australian mining industry or not. Here are a few of the views.

View of Australian Coal Association:

The mining tax is only going to make Australian companies less competitive against foreign-owned opposition and ultimately it will threaten many Australian jobs.

A viewpoint from outside the mining industry:

  • A tax break for Australia’s 2.7 million small businesses to begin this year, which allows businesses with a turnover under $2 million to instantly write off a purchase of a new asset up to $6500.
  • A 1% cut to the company tax rate for all businesses, with small businesses getting a one-year head-start with the cut applied from July 1
  • Investment in roads, bridges and other infrastructure, particularly in mining regions

So, it looks as though the Aussie Government is trying to spread the wealth. Whenever that happens, the side that the wealth is taken from is the one that is complaining. On the other hand, mining businesses will have less revenue to reinvest in themselves, potentially costing mining jobs. It is almost as though the Aussie Government instituted this tax so that they can determine where the investment goes and that is for all businesses, especially small businesses.

Posted Monday, May 7th, 2012 under Metals, Mining, Minerals.


Leave a Reply