Western Australia: Despite the Federal Government giving considerable ground on its proposed mining tax, it remains a major cash grab on an industry which is critical to Western Australia’s future.
The State’s peak business organisation, CCI, acknowledges that the Federal Government has made a number of substantial changes to the proposed tax which will go some way to making it better for the resources sector. The government has come to realise that its original plan was bad for business.
CCI has been at the forefront of the debate over the RSPT. Independent research commissioned by CCI showed the tax would have cost up to 100,000 jobs and slashed $60 billion out of the local economy.
However, CCI remains concerned that the re-badged tax will impact heavily on WA’s employers. Despite being watered down, the government is seeking to impose a tax which in its first two years alone will take $10.5 billion tax out of this State’s, and Nation’s, leading industries.
CCI is also concerned that the deal was struck without comprehensive consultation with business and industry. Fewer than one per cent of all the companies that will be directly affected by the new tax had a seat at the negotiating table.
There remain many unanswered questions about how the re-worked tax will impact on local business. It is unclear whether the original proposal to create a new infrastructure fund is still on the table.
One thing is for certain. Despite WA being home to some of Australia’s most important resource projects, the tax will see more money heading out of the State into the Federal Government coffers than will be coming back.
CCI is also concerned that the government continues to mislead the public by claiming the mining tax will fund increases to the superannuation contribution. The reality is, the payments will come directly out of the pockets of all employers across the country.
There is also a need for the Government to work closely with business to embark on true root and branch reform of the State and National tax systems. Business stands ready to consult on the detail of the Henry Tax Review to deliver a fairer, more efficient, and internationally
Source: http://www.cciwa.com/2_July_2010.aspx#21372
