Taxing times ahead?

SUGGESTIONS of a mining tax to help pay for the government’s COVID-19 response have raised concerns but the good news is they may be little more than a rumour.
Taxing times ahead? Taxing times ahead? Taxing times ahead? Taxing times ahead? Taxing times ahead?

Kevin Rudd trying to sell his RSPT in Perth in 2010.

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Panelists on a Perth TV show raised the spectre of a mining tax earlier this week.

In one way it does make sense. Mining is doing well, even in the midst of the COVID-19 crisis with iron ore sitting around the US$85 per tonne mark.

However, if there is one thing to get Western Australians fired up it is a mining tax.

It just seems so unlikely that prime minister Scott Morrison would want to pull on that sort of fight after the pandemic has been sent packing.

History shows that a mining tax is a bad career move for prime ministers.

Remember the mess Kevin Rudd made of things in 2010 when he tried to introduce the Resources Super Profit Tax.

It has been suggested it took the Hyatt Regency six months to clean up the blood after Rudd came to town to try and sell the tax.

As Rudd was speaking literally across the road from the hotel mining leaders gathered in hi-vis to protest the tax.

Not too long after that Rudd was no longer prime minister.

Raising taxes does not seem to be the way forward and some of the rhetoric from treasurer Josh Frydenberg suggests the government will go the other way.

Minerals Council of Australia CEO Tania Constable believes sensible policy change will help sustain a stronger minerals industry to support a more resilient economy when Australia emerges from the COVID-19 pandemic.

 "Stronger business-led growth will lead Australia to recovery," she said.

"Higher taxes will impede growth and threaten jobs.

"The mining industry already pays its fair share of tax and royalties, with annual contributions of $31 billion funding doctors, nurses, hospitals, police and other essential services and infrastructure in the cities and regions.

"Both the Henry review and Treasury have also stated that the fuel tax credit is good economic policy. The fuel tax credit ensures taxes are not embedded into business inputs. 

"Mining can make an even larger contribution to the economy, regional communities and living standards if job-creating projects were approved faster and duplication between federal and state processes was reduced or eliminated.

"When mining projects can take more than a decade to deliver, it's clear that better regulation can help business play its part in delivering Australia's economic recovery.

"All governments should work together based on the National Cabinet approach to develop and implement policies which encourage investment and job creation."