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Australian mining tax passes first obstacle
Source: Agencies |
November 24, 2011, Thursday
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Print Edition
Print Edition
AUSTRALIAN Prime Minister Julia Gillard has won a victory that may help revive her Labor Party's struggling fortunes after divisive laws for a profit tax on mining companies was narrowly passed by parliament's lower house.
After 18 months of acrimonious debate that brought down former Prime Minister Kevin Rudd, key crossbench lawmakers agreed after a marathon debate into the early hours of yesterday to back Gillard's minority government on the 30 percent profit tax in return for minor concessions.
Gillard wants the new tax on mining profits to pay for a company tax cut and boost payments into worker pension funds, to spread the benefits of Australia's resources boom to parts of the economy struggling with the global downturn.
Treasurer Wayne Swan told parliament: "If we want to leave a stronger Australia for our children, if we want to build the nation, then it takes brave policy proposals like this, which spread the bounty of our country to every corner of the nation."
Last year, mining companies ran a public campaign against Rudd's original 40 percent tax plan, feeding into a voter backlash in which opinion poll support for Gillard and Labor remains near record lows.
Gillard's government relies on three independents and a Green lawmaker for its one-seat majority, and the fate of the mining tax was uncertain until late on Tuesday because of concerns among the Greens.
But the bills passed by 73 votes to 71, with support from the Greens after the government committed to find A$70 million (US$69 million) a year of budget savings by delaying a tax break on overseas borrowings.
The legislation will now go to the Senate early next year, where the government and the Greens have the numbers to ensure it is passed into law.
The Industrial and Commercial Bank of China, the world's biggest lender by market value, said it was already seeing mining projects in Australia being held up because of the impending mining tax.
"We have started to perceive unwillingness to proceed with some projects," said Han Ruixiang, head of ICBC Australia. "So I think it will negatively affect future investment from the Chinese corporate sector into Australia."
After 18 months of acrimonious debate that brought down former Prime Minister Kevin Rudd, key crossbench lawmakers agreed after a marathon debate into the early hours of yesterday to back Gillard's minority government on the 30 percent profit tax in return for minor concessions.
Gillard wants the new tax on mining profits to pay for a company tax cut and boost payments into worker pension funds, to spread the benefits of Australia's resources boom to parts of the economy struggling with the global downturn.
Treasurer Wayne Swan told parliament: "If we want to leave a stronger Australia for our children, if we want to build the nation, then it takes brave policy proposals like this, which spread the bounty of our country to every corner of the nation."
Last year, mining companies ran a public campaign against Rudd's original 40 percent tax plan, feeding into a voter backlash in which opinion poll support for Gillard and Labor remains near record lows.
Gillard's government relies on three independents and a Green lawmaker for its one-seat majority, and the fate of the mining tax was uncertain until late on Tuesday because of concerns among the Greens.
But the bills passed by 73 votes to 71, with support from the Greens after the government committed to find A$70 million (US$69 million) a year of budget savings by delaying a tax break on overseas borrowings.
The legislation will now go to the Senate early next year, where the government and the Greens have the numbers to ensure it is passed into law.
The Industrial and Commercial Bank of China, the world's biggest lender by market value, said it was already seeing mining projects in Australia being held up because of the impending mining tax.
"We have started to perceive unwillingness to proceed with some projects," said Han Ruixiang, head of ICBC Australia. "So I think it will negatively affect future investment from the Chinese corporate sector into Australia."
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