UPDATE: Australian Miners Tax Campaign Irks Greens, Pension Lobby

18th Jun 2010 05:31

(Adds comments by pensions funds lobby, minerals industry lobby) By Ray Brindal Of DOW JONES NEWSWIRES CANBERRA (Dow Jones)--Elements of a campaign by Australia's mining industry against a proposed tax increase on mining super profits were criticised Friday by the Greens political party and a national pension fund lobby. Greens Leader Bob Brown called parts of the campaign by the mining industry fraudulent, while the Australian Institute of Superannuation Trustees said a campaign by the Minerals Council of Australia was misleading and irresponsible. The AIST called for regulator the Australian Securities and Investments Commission to examine claims made in the Minerals Council's campaign that pension investments are threatened as a result of the proposed tax. The AIST accused the Minerals Council of misleading consumers in new advertisements that imply the tax is a "hand grenade" that could derail the retirement plans of Australians. The proposed resource super profits tax has been met with furious opposition from miners since it was unveiled May 2. The government and the mining industry are negotiating details of the tax, which is planned to be introduced in 2012. Unless resolved beforehand, the tax proposal will become a key issue in a general election, likely to be held late this year, possibly in October or November. Currently, the Labor Government doesn't command a majority in Australia's upper house Senate and needs to rely on the support of the Greens and independent senators to pass any legislation. The opposition Liberal-National Coalition opposes the proposed tax. Recent voter surveys suggest the Greens could hold more Senate seats after the election. The Greens want revenues from any super profits tax to be placed in a sovereign wealth fund. The AIST described the latest Minerals Council campaign as "scaremongering and irresponsible" and called on ASIC to review the campaign, which features a 74-year-old retiree who is concerned about the proposed tax's effect on his retirement plans. "Older Australians can be confident that their superannuation and pension investments are performing well. Far from being derailed, most super funds are on track to report double-digit returns this financial year," AIST Chief Executive Fiona Reynolds said in a statement. Recent stock movements show mining shares have outperformed the rest of the Australian share market since the government's resource tax announcement, the AIST said, suggesting a range of factors--notably concerns in European sovereign debt markets--are behind the recent fall in Australian share prices. "During this same period, the U.S. S&P 500 fell 6% compared to the 5.6% fall on the Australian ASX 300," AIST said. The Minerals Council said it is running multiple advertisements, with its main television commercial saying the mining industry helps keep the value of shares in pension funds and investments strong. "No-one would dispute that a strongly performing mining industry helps underpin a strongly performing share market given that mining and energy stocks constitute about a third of the stock market," the council said in a statement. The retiree in the advertisements is expressing his view of the impact of the mining tax on his retirement, the council said: "It is a real world view of the impact of the tax on a retiree." Greens' parliamentary leader Brown said the mining industry risks losing public support the longer its campaign continues. "It's a fraudulent campaign by the big mining barons who simply want to keep the rake-off, rip-off profits that they're making out of the minerals resources boom worldwide out of the property of Australians," he told reporters. In particular, Brown criticized advertising in Friday's newspapers by Rio Tinto Ltd. (RIO.AU) that he said suggested the company is running at a loss in Australia. The advertisement says that in the past 10 years Rio Tinto has earned A$37.4 billion in after tax profit in Australia and invested A$38.4 billion through capital spending and acquisitions. "If it's indicating it's running at a loss in the country, why the hell is it worried about a super profits tax? It doesn't add up. It isn't logical," Brown said. "This ad, subsidized by taxpayers' money, doesn't add anything but confusion to the debate about the mining tax and is treating Australians like mugs," he said. A Rio Tinto spokesman wasn't immediately available to comment. -By Ray Brindal, Dow Jones Newswires; 612 62080902; [email protected] (END) Dow Jones Newswires June 18, 2010 00:31 ET (04:31 GMT)