Minerals Resource Rent Tax
MRRT – The Prime Minister’s Mining Tax Doesn’t Add Up
Fortescue remains totally opposed to the Gillard Government’s Minerals Resource Rent Tax (MRRT). It is bad policy and poorly designed.
The MRRT will ensure the world’s biggest miners have an unfair advantage in the market place by reducing their overall unit cost compared to the smaller miners. It will reduce investment in Australia, measurably and instantly for early stage iron ore and coal projects as investors are encouraged to invest in projects and employment opportunities away from Australia.
Mining is the backbone of the Australian economy which this tax will hurt. If the MRRT cannot be scrapped there must be tax equality between all companies and amendments must be introduced to ensure that junior miners pay the same rate of tax to be paid by the major miners. It is only fair and sets an equitable base for the industry and for investors to have a level playing field.
As an interim measure, Fortescue also calls on the Government to release the assumptions and financial modelling it has used to estimate forecast revenue from the MRRT.
Fortescue’s modelling and independent research verifies that we will not be paying any substantial MRRT contributions. We also know through independent research that BHP Billiton and Rio Tinto won't be paying any substantial MRRT. So how will the Government collect its proposed $11 billion from the iron ore and coal mining industries if the top three iron ore producers aren't paying MRRT? Will they guarantee that no other mineral producers will be included in the MRRT tax grab? They know the modelling doesn't work yet they continue to say that the major mining companies will pay 90 per cent of the tax. It doesn't make sense.
Fortescue Chairman Andrew Forrest explains the flaws in the Gillard Government's MRRT.