Advisory panel pushes Rudd to lift tax threshold
By MATHEW MURPHY | smh.com.au | 27 May
THE chairman of the Rudd government's resource tax consultation panel says one of its main messages to ministers will be a need to raise the level at which its 40 per cent rent tax kicks in.
As the panel prepares to hand its initial report to the government tomorrow, the Treasury official David Parker told a chartered accountants' forum that linking the resource rent tax to the long-term bond rate, currently about 6 per cent, was one of the miners' main grievances.
''There have been long and deep discussions about that with the consultation panel,'' he said. ''Companies have said they would prefer to do it another way. The panel will be reflecting and passing on that view to the government.''
However, while the panel is entrusted to canvass the views of the resources industry, its power to make recommendations is limited.
Mr Parker rejected suggestions that there was no consultation with resource sector leaders before the release of the Henry tax review more than three weeks ago. And, he said, despite public threats by some miners that they would take their business overseas, those had not been expressed before the panel.
''There is a very big political debate going on at the moment whether there is a tax or not, what form it will take, and that will be won or lost in the political arena,'' he said. ''There is a lot of positioning going on around that … we will see how things settle down. Certainly it hasn't been said to me in any discussions that they will go offshore.''
Mr Parker said the ''unfortunate'' outcome of the war of words between the miners and the government was increased uncertainty, making it hard for investors to make decisions.
''My objective … is to try and get uncertainty down to the lowest possible level as soon as we possibly can so people can make informed judgments and the best decisions.'' He said the stoush over how much tax the miners are actually paying was an ''oils ain't oils question''.
''The Treasury analysis says if you measure the income tax of the sector … and you don't treat royalties as a tax, you treat it as an input, then you end up with a lower tax rate. The mining companies are saying if you look at my taxable income then you get a different result,'' he said. ''It is wickedly difficult to do international comparisons on different taxes in different countries.''
First published by Smh.com.au on May 27 2010
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