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Aussie govt under new mine tax revenue attack

business Updated: Jul 06, 2010 22:21 IST
Michael Perry
Michael Perry
Reuters
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Australia’s opposition accused the government on Tuesday of misleading voters over billions of dollars in lost tax revenue, reigniting a row over a politically-damaging mining tax ahead of election.

Prime Minister Julia Gillard ended a three-month dispute with global miners last Friday by announcing a watered-down tax, but revelations the new tax revenue was based on higher commodity forecasts put the tax back in the public spotlight.

The Labor government said it would lose only A$1.5 billion ($1.3 billion) in revenue, but the conservative opposition said the loss could be A$4.5 billion.

However, the government said revenues will not impact its budget, as economy grows. “You still get robust (mining tax) revenue over the forward years,” said Craig Emerson, small business minister, citing the government’s revenue estimate of A$10 billion.

Figures released on Tuesday showed Australia’s trade surplus swelled to the third highest on record in May as exports of gold, wheat and coal surged.

“It’s a big tick in the box for stronger growth in the second half,” said Brian Redican, senior economist, Macquarie.

Economists said any discrepancy in projected 2012 mine tax revenue was too far in the future to cause conern now, citing China and India continued hunger for Australian minerals.

“The focus now is Asia and emerging nations, rather than developed nations. The China story and India story is in its infancy,” said Craig James, chief economist, CommSec

BHP Billiton, Rio Tinto and Xstrata all signed off on the new tax and none has commented on the reported revenue shortfall so far. Reuters