UPDATE: Australia's New PM Calls For Truce With Miners In Battle Over Tax

24th Jun 2010 04:17

(Adds background and comment from mining industry source) By Alex Wilson Of DOW JONES NEWSWIRES MELBOURNE (Dow Jones)--Australia's new Prime Minister Julia Gillard Thursday called for a truce in the battle between the mining industry and the government over its planned new tax but said she remained committed to meeting the budget targets underpinned by the tax. While Gillard is promising to enter into genuine negotiations with the mining industry over the tax, miners remain skeptical about how much ground the government will be willing to give. The mining industry has launched a fierce campaign against the new 40% Resource Super Profits Tax, which they argue will put investment in the Australian mining sector at risk and cost jobs, while the government has accused the industry of not carrying its fair share of the tax burden. Gillard, who Thursday replaced Prime Minister Kevin Rudd after an unprecedented leadership spill, said the government would cease the advertising campaign it was running in favor of the proposed tax and asked the miners to cease their own advertising campaigns. "Australians are entitled to a fairer share of our inheritance, the mineral wealth that lies in our grounds," she told reporters. "But to reach a consensus we need to more than consult, we need to negotiate and we must end this uncertainty that is not good for this nation." Gillard said she was throwing open the government's door to the industry and asked that in return they open their minds. However, Gillard also recommitted the government to returning the budget to surplus by 2013, a forecast underpinned by the funds the government expects to raise from the tax. Spokesmen for BHP Billiton Ltd. (BHP.AU) and Rio Tinto Ltd. (RTP), who have been leading the charge against the tax, were not immediately available for comment. A person close to one of Australia's biggest mining companies said Gillard has more room to back down on the tax or to announce a wide-ranging review of it, but that there was no guarantee she would do so, especially with a key architect of the tax, Wayne Swan, keeping his role as treasurer and set to lead negotiations. "The miners see it as potentially a circuit breaker but one that is not automatic, and they will be very wary," the person said. - By Alex Wilson, Dow Jones Newswires: 613-9292-2094; [email protected] (END) Dow Jones Newswires June 23, 2010 23:17 ET (03:17 GMT)