The Chamber of Minerals and Energy of Western Australia (CME) is urging caution ahead of next week’s Federal Budget.
Speculation about changes to exploration deductions, diesel fuel rebates and the thin capitalisation ratio are of concern to the resource sector.
“A knee-jerk reaction in efforts to plug a budget gap by stifling the strongest industry in the country will not achieve the aim of increased revenues in the long run, said CME Chief Executive Reg Howard-Smith.
“Any tax law amendments that bring about further costs to the resources sector, which is already dealing with significant increases in the cost of doing business, need to be shelved,” said Mr Howard-Smith.
“The sorts of taxation changes which have subject of much speculation aren’t based on sound tax policy and will ultimately hurt Australia’s international competitiveness. Governments must do everything possible to protect our reputation as a stable and reliable environment in which to do business,” said Mr Howard-Smith.
CME’s earlier submissions to the government’s Business Tax Working Group (BTWG) argued strongly against piecemeal and ad hoc changes. The BTWG itself, despite canvassing those speculated tax changes in its Discussion Paper, didn’t recommend any changes.
This week’s Senate Economics Reference Committee report on the Minerals Resource Rent Tax highlighted the need to keep mining strong and maintain a globally competitive tax and fiscal regime to help drive our future prosperity
“To impose additional taxation burdens on an industry that is the main driver of economic growth in Australia is not smart. Ill-conceived changes in tax policy, without sound economic planning will risk imposing significant damage to an industry which relies on long term expenditure planning,” said Mr Howard-Smith.
The Western Australian resources sector looks forward to working collaboratively with government to ensure the sector continues to grow. It is only with planned and sensible policy initiatives that we will continue to see real economic benefits flow to all Australians.