Mining super profits tax consultation for two years, says Kevin Rudd

PRIME Minister Kevin Rudd has attacked Opposition claims the mining
sector was not properly consulted over the proposed resources super profits
tax.

Opposition Leader Tony Abbott again raised
concerns around the time frame for consultation and whether the mining sector
had been involved in the process.

Mr Rudd said the process that led to the Government to propose a profits-based
tax for the resources sector began more than two years ago.

The reform process began in May 2008 when the Government announced the Henry
review, he said.

In August 2008, the Government issued a discussion paper related to the review
which raised the point that a royalties-based system was inefficient and that a
profits-based tax should be considered.

Mr Rudd said the Government then released a more detailed consultation paper
which included a definition of super profits.

Start of sidebar. Skip to end of sidebar.

Related Coverage

Pressure: PM
needs solution

End of sidebar. Return to start of sidebar.

More than 1300 submissions on the plan were received from the mining sector in
May 2009, including on the introduction of a profits-based tax.

"This process has been under way for two years," Mr Rudd told
Parliament, adding it was not the "bolt out of the blue" inferred by
the Opposition.

"The Government is now in the business of negotiating with the mining
industry and the Government is now engaged in detailed negotiations on details
on implementation and on generous transitional arrangements".

"That is the normal way in which you engage in a process of tax
reform".

Treasurer Wayne Swan also rejected suggestions
from mining giant Rio Tinto that the federal government had not consulted it
about the controversial mining tax.

"This is not true. There have been numerous discussions with the company
and they should not be pretending otherwise," a spokesman for the
treasurer said.

Rio Tinto has said it has still not held talks with the federal government on
the proposed 40 per cent resource super profits tax.

"From the outset of the Henry Review, Rio Tinto has wanted to provide
constructive input to help deliver tax reform that attracts investment to
Australia," a Rio Tinto spokesman said in an emailed statement.

"There was no consultation on the mining tax either before the May 2
announcement or since.

"We remain keen to engage with the government to get the right outcome for
the Australian economy."

Rio Tinto Iron Ore chief executive Sam Walsh last week told Deputy Prime
Minister Julia Gillard at a Perth business function that the consultation
process had been "absolutely hopeless".