November 2nd, 2011

Ferguson says dealing with independents on mining tax ‘part of democratic process’

By Babs McHugh and Michael Condon

It cost the leadership of one Prime Minister and has stretched the resolve of another. Now the mineral resource rent tax (MRRT) is before Federal Parliament, a year after it was first introduced.

The controversial legislation is likely to be mired in the political process for some time, despite Federal Government assertions there will be no changes to the framework it agreed to with BHP Billiton, Xstrata and Rio Tinto.

The MRRT is far from a done deal. To pass the House of Representatives, it needs the support of four cross-benchers, including three independents, and they all have their demands.

Independents Andrew Wilkie (Denison,Tasmania) and Rob Oakeshott (Lyne, NSW) want protection for smaller mining companies which they say are being treated unfairly in terms of the asset write-downs that have been agreed to under the deal.

Mr Ferguson says while some sections of the mining industry maintain the tax discriminates against them, the bill addresses issues such as the lower profit thresholds and the high costs of increasing the ferrous content of low quality iron ore, magnetite.

“When you go through it, you will see that magnetite pays little or no tax, because at the point of taxation, the dirt that is then used for huge processing – which adds the value – is of little value itself…

©Australian Broadcasting Corporation

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