Australia’s Senate has scrapped a 30% “super profits” tax on mining companies in a huge victory for Prime Minister Tony Abbott and miners of iron ore and coal – the country’s two largest exports. While the conservative leader used the Mineral Resource Rent Tax (MRRT) repeal as a campaign centerpiece, it stalled in a hostile upper house amid intense budget cuts; a controversial carbon tax ban passed earlier in 2014.
“The tax package was poorly designed, costing billions each year,” Finance Minister Mathias Cormann said, citing $9.29 billion in losses; lower house approval this week is predicted a formality. Officials at Australian-based miners including BHP Billiton plc and Rio Tinto said taxes were untimely after a 10-year mining boom; Rio CEO Sam Walsh added “this will be positive for investment and jobs,” reported The Wall Street Journal; Fortescue Metals Group Ltd. previously sought to overturn the levy in court.
The Minerals Council of Australia (MAC) said the MRRT was based on “the false premise the industry was not paying its fair share,” despite federal taxes and state royalties totaling $156 billion; industry taxes also jumped to 25% from 8% over the past decade. Since 2011, iron ore and coal demand also fell more than 50%.