The mining engineering industry has welcomed news that legislation to repeal the Mineral Resource Rent Tax (MRRT) has been published by the federal government.
Released on Thursday (October 24), the document outlines the Coalition’s plans to remove the tax from July 1 2014.
The Association of Mining and Exploration Companies (AMEC) was among the first organisations to come out in support of the move, adding that Australia’s attractiveness as an investment destination has faltered since the MRRT’s introduction.
Simon Bennison, chief executive officer of AMEC, said the decision to repeal the MRRT will go a long way to restoring confidence in the mining sector.
“The repeal will remove costs on industry as well as save the government millions [of dollars] in the administration of the tax,” he stated.
“AMEC has consistently stated that the mining tax was an ill-conceived, poorly designed, discriminatory and a refutably bad tax that should be rescinded and replaced with a long-term tax strategy that encourages investment and is internationally competitive.”
Further support for MRRT repeal
The Minerals Council of Australia (MCA) also came out in support of the draft legislation, with chief executive Mitchell Hooke saying the levies imposed on mining firms were among the highest in the world.
While the country will still remain a relatively expensive destination to do business, he added, this repeal should help the iron and coal industries to continue underpinning the economy.
“Coal and iron ore mining are the nation’s two largest export earners,” Mr Hooke commented.
“They have played a key role in supporting Australia’s current prosperity, boosting incomes and jobs and helping to cushion Australia’s economy from recession during the global financial crisis.”
He added that the resources industry has gone from contributing $4 billion a year in royalties and taxes to $20 billion.
Since 2006-07, this has amounted to $117 billion in corporate tax, with businesses consistently facing charges of more than 40 per cent.
MRRT repeal ‘will boost economy’
According to the federal government, the repeal will save around $13 billion for the Budget based on forward estimates.
Rescinding the MRRT was a key policy in the Coalition’s pre-election manifesto, with its leaders arguing that the mining charge failed to accrue the revenues it had promised.
The government has claimed it created significant compliance costs for organisations, as well as preventing job creation.
“The repeal of the MRRT will contribute towards repairing some of the fiscal damage inflicted by the previous government on our nation’s finances,” it said.
Interested parties have been invited to make submissions regarding the draft repeal legislation by post or email, although electronic submissions are preferred.