Labor senators look set to ignore a plea from business groups to ditch the mining tax after Opposition Leader Bill Shorten reaffirmed his commitment to vote down the government’s repeal legislation.
As the Senate began debate on the repeal of the minerals resource rent tax (MRRT), three major business groups joined forces urging the upper house to axe it.
Legislation to repeal the 30 per cent impost on the super profits of iron ore and coal companies has been stuck since last year in the upper house, where the government does not have a majority.
Asked whether he had changed his mind in standing against the repeal of the MRRT, Mr Shorten said: “No. We will be voting against the repeal of the mining tax.”
People should have their fair share from natural resources when companies were making very large profits, he told reporters in Canberra on Tuesday.
“It’s a very sound principle,” he said.
Last week Mr Shorten, when visiting Western Australia ahead of next month’s Senate election re-run, appeared to signal that Labor could make future changes to the impost, saying it must engage with the resources sector over its mining policies before the next federal election.
This wasn’t lost on Prime Minister Tony Abbott when quizzed on the MRRT in parliamentary question time.
“Even the leader of the opposition wants to get rid of the mining tax when he’s in Western Australia,” Mr Abbott said.
The Australian Chamber of Commerce and Industry, the Business Council of Australia and the Minerals Council of Australia say the tax imposes an unnecessary burden on the industry.
“The mining tax is simply another layer of tax on top of company tax and royalties,” they said in a joint statement on Tuesday.
The groups believe repealing the MRRT will help improve Australia’s reputation as an attractive investment destination in the highly competitive global resources market.
Separately, the Australian Industry Group also supports the repeal of the “poorly designed” tax, but it wants two business tax initiatives that were supposed to be funded by the MRRT retained.
These are the loss carry-back provisions and the $5000 instant asset write-off facility, which the government wants to cut to $1000.
Ai Group chief executive Innes Willox said the loss carry-back measure boosts companies’ cash flow in years that they make a loss while instant write-off provisions allow small businesses early deductions for investments in capital equipment.
Mr Willox said retaining these measures would boost investment and private-sector employment at a time when the economy was being restructured considerably and was struggling to generate jobs.