Gillard announces mining tax breakthrough

After days of negotiations in a 'windowless room' with 'sleeves rolled up' Prime Minister Julia Gillard has announced a breakthrough agreement this morning for the super profits mining tax.

The new Minerals Resource Rent Tax (MRRT) will be cut to 30 per cent, down from the previously 'not-negotiable' 40, and will only apply to coal and iron ore. Oil and gas projects will come under the current Petroleum Resource Rent Tax (PRRT) regime.

The government compromises result in a loss of revenue of $1.5 billion which means the proposed reduction of company tax will be halved. Instead of falling to 28 per cent, it will drop to 29 per cent in 2013/14 for big companies and 2012/13 for small business.

The proposed funding of a superannuation guarantee increase will go ahead and it will rise to 12 per cent, meaning more super for working Australians. A Policy Transition Group chaired by Don Argus will assist the government and mining industry in implementation of the new arrangements.
Ms Gillard said this agreement, signed with three of Australia's biggest miners, provided 'stable, coherent government and a positive basis for trust'.

'Australians are entitled to a fair share of the mining wealth in our grounds,' she said, adding that the MRRT would allow the Australian population and the mining industry to 'both prosper together' from resources that can 'only be dug up once'.

As if to highlight her change in strategy to that employed by Kevin Rudd, Ms Gillard said the real breakthrough was the 'hard, frank discussion' that took place between the government and miners.

'I've learned across life that things work best when you get people around the table'.

During the press conference announcing the MRRT this morning, Ms Gillard would not be drawn into discussing the implications of a large vested interest, protesting and advertising in order to see substantial change in government policy.

The last time this occurred was when the union movement advertised heavily against the Howard government's Work Choices legalisation. The then government refused to negotiate and lost the 2007 election. This time it cost a Prime Minister his job. ACV