Document 10

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2

Media Monitors
STfl)'  t"OOnECT€P

Media Monitors Client Service
Centre 1300 880 082

Copyright Agency Ltd (CAL)
licenced copy

Australian Financial Review, Australia
22 Mar 2012, by Fleur Anderson And Louise Dodson

General News, page 1 - 443.25 cm2
Australian National  -circulation 72,282 (MTWTFS)

ID 138699245

PAGE   1 of2

Diesel slug looms in
tax cut deal

Aeur Anderson and Louise Dodson

The Greens are pressing Labor to cut a $2 billion diesel tax rebate for mining companies after government officials warned the miners to expect more tax rises in the federal budget.
Miners fear the diesel rebate could

Swan's business carryback tax loss plan and a $2.4 billion tax cut to big and small companies.
But Australian Greens deputy leader senator Christine Milne said yesterday that "if the government is
looking for ways to save money and balance the May budget, the $2 bil­ lion diesel fuel rebate is an excellent place to start and the Greens will continue to back such a move".
The Australian Financial Review reported yesterday that departmental and  industry  sources  said  the  Gil­ lard   government   was  looking   at
tightening access to the diesel fuel credit scheme, which is worth $5 bil­ lion  a  year of  which miners  claim
40 per cent.
The  Financial Review has  now

been told by government otttctals tor some time to expect further  tighten­ ing of the diesel rebate.
The government is also consider­
ing changes to "thin  capitalisation"
rules that currently allow some multi­ nationals, including some miners, to heavily gear their  Australian  arms,
effectively shifting profits overseas. Labor will also consider the aboli­
tion of accelerated  depreciation  for
the aviation.  transport, and oil and gas industries  in a second round of
tax reforms.
The Greens have said they will vote
with the Coalition  to block Labor's promised cut in the corporate tax rate from 30 per cent to 29 per cent from
July 1, 2013.
Contirued page 4

be sacrificed  in negotiations  to win
0'ees up mrt for Tre_asu:er Wayne

!earned_  at mining comp Ei7s_h ve

Diesel fuel rebate slug looms in tax cut deal

From page 1
While the Greens are open to a cut for small business from July 1 this year Labor has said it will not accept a two-tier tax system
A cut in the diesel rebate scheme
would deliver the Greens a chance to offset the tax cut for big business and meet its goal of taxing miners such as gold and  uranium  that  are  not cov­ ered  by the minerals  resource  rent
tax, which passed this week
A spokesman for Mr Swan said the
government did not intend  to com­
ment on budget speculation.
While  the government  negotiates
with the Greens  to win support  for
corporate tax cuts in Parliament, Mr
Swan has reserved his vitriol for the
Coalition which reversed its position on the tax cuts last week and will also

Win win solution ••• Greens leader Bob Brown yesterday.	Photo:ANDREW MEARES

oppose the tax cuts.
The   government   yesterday   pro­
vided Treasury analysis of the Coali­
tion's opposition to a I per cent com­
pany tax cut and a 1.5 per cent tax increase on big companies to fund its
paid parental scheme.
The manufacturing sector  would
pay an extra $392 million in tax, the retail sector  an extra  $270 million.
the wholesale trade  sector  an  extra
$400 million. the media and telco sec­
tor  an extra  $188 million.  the con­
struction  sector  an extra  $322  mil-

lion, and the agriculture, forestry and
fishing sector an extra $306 million. Miners   will  already   have  their diesel tax credit cut by 6¢ a litre from
July 1 as part of the introduction  of the carbon tax and the federal govern­ ment agreed to ask the Productivity Commission to examine reforms to fuel excise as part of its carbon pack­ age deal with the Greens.
Minerals  Council of Australia chief executive Mitch Hooke said a reduction in the fuel tax credit would be the fourth new tax on mining this

year. "The  mining  tax,  carbon  tax
and  reduction in fuel tax under  the price on carbon all start  on July 1,"
Mr Hooke said
"A  new reduction  to the fuel tax
credit  scheme in  the  budget  would
make it new tax No. 4 in 2012."
He said miners, farmers and other
industries  paid the excess tax in the
first place solely as a means of "eas­
ing  the administrative burden"  on
government.
"Taxes on business inputs are espe­
cially  inefficient   and  contrary   to

Media Monitors
SlAY conneetro

Media Monitors Client Service
Centre 1300 880 082

Copyright Agency Ltd (CAL)
licenced copy

       Australian Financial Review, Australia
22 Mar 2012, by Fleur Anderson And Louise Dodson

General News, page 1 - 443.25 cm2
Australian National  - circulation 72,282 (MTWTFS)

ID 138699245

PAGE   2 of2

good  tax  policy  principles,  a  point that Treasury has held to strongly in the past whether in the context of fuel tax or broader reforms like the GST," Mr Hooke said.
But the Greens  are pushing  for a cut to the miners' fuel rebate.
"We've  said   to  the  government
many times that cutting subsidies which encourage use of polluting fos­
sil fuels, like the diesel fuel rebate for mining companies,  is not only sensi­ ble climate  policy but also sensible economic  policy," Senator  Milne said.
"People all  across  the Australian
community  who pay tax on the fuel
they buy would be very unimpressed if they realised that the mining com­
panies making multibillion dollar profits pay not a cent in tax on the diesel that runs their trucks and their generators."
Senator Milne said Australia had promised  to abolish fossil fuel subsi­ dies as part of its Group of 20 obliga­ tions, but now Treasury says that Australia does not have any.
Mining  companies  would have to make renewable energy in remote areas more competitive if they did not
have access to the fuel rebate.
But the mining industry rejects the
Greens' arguments, saying the diesel
tax credit is not a subsidy but actually

removes a tax impost  on a business input in line with other taxes on busi­ ness inputs.
"If the federal government is plan­
ning yet another tax increase it would be a shameless cash grab to prop up
the budget and help deliver a mislead­ ing surplus," the chief executive of the NSW Minerals Council, Stephen Galilee, said.
The threatened  further  cuts to the credits prompted some tax experts to call for a broader overhaul of the regime, which was recommended  in the Henry tax review.
·"It would be really refreshing if the government were to have a look again at a much more holistic reform," said Tax Institute senior tax counsel Robert Jeremenko.
"Let's  have a look at how we can
reform the whole fuel tax  area  and consider a congestion charge."
Mr Jeremenko said the government should revisit such recommendations made by the Henry  panel, including having a structured road user model where  money  raised  would  funnel directly to road infrastructure, rather than going into consolidated revenue. The money raised could allow the lowering of motor vehicle registration fees and scrapping of stamp duty on
cars, he added.
with Katie Walsh