SA miners hit by double tax: SACOME

SOUTH Australia’s peak mining lobby has come out swinging against the federal government’s stance not to credit state royalty increases against the Minerals Resource Rent Tax, saying its fledgling iron ore and coal industry would be left facing a “double tax”.

The South Australian Chamber of Mines and Energy (SACOME) said it had written to federal Resources Minister Martin Ferguson arguing that recent increases in the state’s mining royalty rate announced in last month’s state budget should be credited, as originally agreed, under the terms of reference for the new MRRT.
According to the terms of reference for the MRRT, all state and territory royalties can be credited against the MRRT.
However, the issues paper released by the Policy Transition Group states that “state and territory royalties will be creditable at least up to the amount imposed at the time of announcement, including scheduled increases and appropriate indexation factors”.
“It is our understanding that the government’s position is that unscheduled royalty increases after May 2010 are not creditable against the MRRT,” SACOME chief executive Jason Kuchel said.
“This is unsatisfactory and contrary to the terms of reference. It is clear that the terms of reference does not delineate between scheduled or unscheduled increases.”
He said with royalties in South Australia recently increasing from 3.5% to 5.0%, it would be unfair for South Australia’s mining industry to be hit with a “double tax”.
“In discussions with the state government, SACOME was left with the clear impression that it also understood that all royalties would be credited under the MRRT – and we now call on the SA government to strongly lobby their federal counterparts on behalf of the South Australian mining industry in this matter,” Kuchel added.

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