Analysts estimate what MRRT will cost BHP and Rio

Ahead of reporting season, brokers have begun forecasting the impact of Australia’s Minerals Resource Rent Tax on heavyweights BHP Billiton and Rio Tinto, according to the Deal Journal Australia section of The Australian.

Deutsche Bank analyst Paul Young reckons accounting adjustments could see the both BHP and Rio create a deferred tax asset (DTA) worth between $US1 billion and $3 billion, which will be unwound as the MRRT is paid.

“Coal miners may not book a DTA due to the current outlook for coal prices; however, the iron ore miners will likely book a DTA,” Young said in a note to clients, adding the DTA will be recalculated every six months and will depend on variables including the iron ore price, mine life, net asset backing and book value.

Australia’s lacklustre IR scorecard

Australia is lagging behind in workplace performance and flexibility for employers, according to a global survey that highlights competitiveness problems for businesses in a high-cost, low-productivity nation, the Australian Financial Review reports.

Just days before Labor releases its Fair Work Act review, Australia’s workplace regime has been ranked 12th among 51 surveyed countries, behind the winner Norway, New Zealand (5th), the United Kingdom (8th), France (9th) and Singapore (10th).

The index by the Economist Intelligence Unit (EIU) also found Australia had the highest hourly pay rates in manufacturing, while faring poorly on regulation, strikes and policy.

It comes as national legal firm Freehills argues that enterprise bargaining is “far more of a threat than an opportunity” under the Fair Work Act for most employers.

The Australian Institute of Company Directors has also released a working paper deriding red tape and accusing the Gillard government of doing insufficient research on the potential impacts of its Fair Work Act, relying instead on the subsequent reviews.

China raises ownership hurdle in FTA talks

Long-running talks aimed at sealing a free-trade agreement between Australia and China have become bogged down amid a Chinese push for a relaxation of Australian regulations on foreign investment, according to The Australian.

And it is understood Coalition promises of even tougher regulation have angered the Chinese, sparking a government warning yesterday that Tony Abbott's approach to trade with China would likely kill the FTA talks "stone dead".