News Wrap

IN THIS morning’s News Wrap: Cascade pair target Obeids for payback; mining employs three times more than thought, says RBA; and mining tax valuation turmoil predicted.

Staff Reporter

Cascade pair target Obeids for payback

The family of former New South Wales Labor minister Eddie Obeid could be forced to repay $13 million in secret payments from a coal company at the centre of NSW’s political corruption inquiry, according to the Australian Financial Review.

A lawsuit filed in the Federal Court by multimillionaires Neville Crichton and Denis O’Neil is the first to arise out of the deal which is the focus of a NSW Independent Commission Against Corruption inquiry.

The two businessmen, from Sydney’s eastern suburbs, are seeking an order that their investment in Cascade Coal, a company owned by mining mogul Travers Duncan and six associates, should be “traced” into the hands of the Obeids.

The ICAC has heard that Cascade Coal embarked on a $28 million share issue in 2010 to raise cash to buy out the Obeids’ 25% stake in an allegedly corrupt coal venture in the NSW Bylong Valley near Mudgee.

Mining employs three times more than thought, says RBA

The Reserve Bank of Australia estimates that more than 1.1 million Australians are employed directly or indirectly by resource industries, more than in manufacturing and three times as many as had been thought, according to the Australian Financial Review.

The detailed analysis skews the common view that mining accounts for only a fraction of the total workforce.

RBA researchers calculate that resources employ as many people as retail and construction and twice as many as tourism.

The findings highlight Australia’s growing reliance on resources and the likely threat to economic growth, jobs and the federal budget from falling commodity prices.

Mining tax valuation turmoil predicted

Tax experts say miners risk falling foul of the Australian Taxation Office over valuations used in calculating mining tax as desperation for revenue grows, according to the Australian Financial Review.

The ATO has made it clear it will closely inspect valuations and experts say disputes are inevitable, based on experience in similar fields.

“If they are really unhappy with the way a lot of valuations look, I think the ATO has clearly flagged that it’s something they’re quite prepared to challenge,” Ashurst partner Teresa Dyson said.

With Minerals Resource Rent Tax collections dramatically down on expectations – $126 million for the half year to date, against hopes of $2 billion for the year – Dyson said the ATO might see value in pursuing it.

MRRT calculations are derived from methods used to value cross-border transactions within multinationals.