Thursday, February 11, 2010
BHP Billitonís chief executive, Marius Kloppers, following the announcement of the mining groupís interim results, stressed the importance to Australiaís mining sector of taxation remaining unchanged during the life of its long-term investments.
Marius Kloppers did not refer to it specifically, but it has been speculated recently in the media that the Henry tax review could have recommended that the 40% petroleum resource rent tax, which is presently imposed on Australiaís offshore oil and gas industry, should be extended across the whole of the countryís mining sector. A possible national resources rent tax would replace the current state mining royalties, which vary between 2% and 10% of mining company revenues.
The government has yet to release the tax review, but the speculation about future mining taxes was begun in a speech by Ken Henry himself on January 21 when he talked of how Australiaís natural resources were only partly taxed through company income tax.
Such a rise in taxation would obviously shrink the present and future net profitability of mining investments in Australia that have already been made, or which would fall to be decided upon in the future.
Kloppers pointed out that it is therefore extremely important for mining companies when they make an investment to know that all of the costs involved, including taxation, will be as projected throughout the long life of that investment.
He is reported as saying that a competitive and stable fiscal regime, as had existed for the mining sector in Australia in recent times, was necessary to maintain investment for growth.