TAX NEWS - June 2010

South Australian mining body criticises tax consultation process

PERTH -- The South Australian Chamber of Mines and Energy (Sacome) on Tuesday criticised the resources tax panel secretariat, saying that it was inadequately empowered to discuss the "most problematic features" of the proposed tax reform.

Sacome criticised the secretariat as being "too wedded" to the proposed super profits tax (SPT).

The industry body also said that its members had been frustrated by Friday's hearings in Adelaide, as grievances by South Australian miners were heard by the secretariat of the resources tax consultation panel, and not the panel itself.

Sacome noted that the one-day hearing is the only scheduled date for the South Australian resources industry to express its concerns about the reforms – in spite of the state being home to the Olympic Dam mine, where a planned A$20-billion expansion was now threatened by the tax.

"The so-called consultation appeared to be little more than an attempt by Treasury representatives to sell the tax to our industry rather than to try and understand our concerns," said Sacome CEO Jason Kuchel.

"Of critical concern, is the fact [that] the secretariat showed a lack of understanding of the cyclical nature of the mining industry. Members appeared very much stuck on the theory of their taxation ideals and do not sufficiently grasp the realities of the mining world and the national economic impacts of this proposed impost," he said.

Kuchel noted that issues of greatest importance to the state's miners, such as flow-through share schemes, were not on the table for consideration.

"Until the government drops its inflexible approach to its consultations, it is a waste of time for the industry here or anywhere in Australia to make representations to the secretariat or panel."

Kuchel said Sacome would seek a direct meeting with the SPT panel members to lobby against the tax in its current form.

Sacome said earlier this month that up to A$40-billion worth of mining projects in South Australia could stall because of the proposed SPT.