UPDATE: Australia's Swan: Government Committed To Profits Based Mining Tax

24th Jun 2010 23:56

By Lyndal McFarland and Geoffrey Rogow Of DOW JONES NEWSWIRES MELBOURNE (Dow Jones)--The Australian government is genuine in its call for negotiations with the resources industry over a new taxation regime but remains committed to applying a profits-based tax to the sector, Treasurer and newly-appointed Deputy Prime Minister Wayne Swan said Friday. "We are committed to a profits-based tax. The mining industry say they are committed to a profits-based tax as well... We are genuine in our desire to negotiate with the industry," Swan told Australian Broadcasting Corp. radio. Julia Gillard was sworn in as Prime Minister Thursday after Kevin Rudd quit the role in the face of a leadership challenge and in her first press conference as Prime Minister called for a truce in the increasingly bitter battle between the mining industry and the government over Rudd's planned Super Resources Profits Tax new tax. "It is the same tax that is on the table, it is a profits-based tax," Swan said, but when asked if the 40% tax rate, as Rudd had proposed, would remain Swan said: "The 40% is used with the PRRT (petroleum resource rent tax), for example but I am not going to go into a discussion about all of the details. We're going to go into these negotiations again about all of the details with good faith ...and resolve this matter." Gillard said Thursday she was open to a new round of negotiations with the sector over the tax after miners including BHP Billiton Ltd. (BHP.AU) and Rio Tinto Ltd. (RIO.AU), complained that previous negotiations were not serious. "We have had very productive talks with significant sections of the industry. But it is also true to say that other sections of the industry did not engage in those negotiations," Swan said. "The door is now open, in good faith. I am not going to preempt those discussions," he said. In response to a call for a truce from Gillard, the mining industry has agreed to suspend a fierce campaign against the RSPT, which it had argued would put investment in the Australian mining sector at risk and cost jobs. The government has also suspended its publicly-funded advertising of the tax plan. Swan said the decision from both sides to halt advertising campaigns reflected a broader change of approach in the discussions, which will likely veer far from the public space for now. "You don't conduct it with a public megaphone," said Swan. Swan also said that the government is committed to returning its budget to surplus and the mining tax would not affect that target. "The mining tax is not essential for the budget to return to surplus. The budget is going to return to surplus in three years time... and it is not dependent on revenue from the mining tax," he said. "We will spend the revenue from the mining tax on improving superannuation, on cutting the company (tax) rate and boosting infrastructure and I made the point on day one that if that revenue was not available, it would be hard to deliver all those initiatives," Swan said. Later Friday, Swan will head to Canada for the latest Group of 20 meeting. However, he will not be accompanied by Gillard, a decision that has raised some eyebrows in the country, with critics arguing this decision may harm Australia's position in the G-20. Swan dismissed that criticism, telling ABC's AM program that, "I've attended all G-20 meetings with the (former) prime minister....I'm very familiar with all the issues and I'm very familiar with all the leaders and the finance ministers in the meeting." He said that he believed Gillard would prove popular with voters, despite concerns the public may not react well to the way Rudd was dumped by his party. "There was broad support across the parliamentary party for change," said Swan. -By Lyndal McFarland, Dow Jones Newswires; 61-3-9292-2093; [email protected] (END) Dow Jones Newswires June 24, 2010 18:56 ET (22:56 GMT)