TAX NEWS - JUNE 2010

Australia Tax: Australia to tout controversial mining tax at G20

03 June 2010 -- Australia's finance minister Wayne Swan Wednesday said he would be touting the potential benefits of the country's controversial new mining tax at this weekend's G20 summit.

Swan said he expected keen interest from the world's finance ministers on the proposed Resource Super Profits Tax, which he said would be key to sustaining Australia's enviable growth through an expected mining boom.

"The message I will take to the G20 will not be about our success during the global financial crisis, it will be what we are doing to convert these achievements into lasting gains for the country," Swan told reporters.

"I would imagine that when I run into a few of them (finance ministers) at the weekend that there will be a bit of a discussion about this matter (the tax), which will be initiated by them."

Australia Wednesday posted 0.5 percent growth for the first quarter, down from the revised 1.1 percent for the previous three months but in line with expectations, with growth of 2.7 percent for the 12 months to March.

Swan said Australia's performance, underpinned by 50 billion US dollars in government stimulus and strong commodities exports to booming Asian markets, was the envy of the developed world.

"Every time I go to the G20 and we turn up with a really good GDP figure they all say to me, 'How has Australia done this?'" Swan said.

"Countries are looking at behind-the-border structural reform as a way out for the global economy," he added.

Galvanised in opposition to the proposed 40 percent levy, the powerful mining industry converged on Australia's capital Wednesday to place the tax reforms front and centre of their annual conference.

Resources Minister Martin Ferguson said the government was "looking at ways your concerns can be addressed, for example, through generous transition arrangements," but told delegates the base rate was not up for negotiation.

Swan said he would visit China after the G20 meeting for high-level talks with the National Development and Reform Commission and the People?s Bank of China, but denied they were motivated by concerns over the tax.

"My trip to China has been planned for a long time, well before the government's response to the independent review of the taxation system," he said. "I'm taking the opportunity as I do regularly to talk with senior people in the Chinese administration."

"I will say everything in China that I say domestically, I will not say anything different," he added.