3 May 2010

40% mining tax proposed

4:56 pm on 3 May 2010

The Labor government in Australia is proposing a 40% tax on mining profits, which it estimates as being worth $9 billion a year.

The ABC reports the federal government would spend this revenue to cut company tax, and boost infrastructure and superannuation incentives.

The government says Australians have missed out on $A35 billion in the past decade because taxes have not kept pace with the mining boom.

Prime Minister Kevin Rudd says the new tax will boost activity in the mining industry.

However, Opposition leader Tony Abbott says it will discourage investment.

Mr Abbott has not confirmed whether he will block the measure in Parliament, but says he is "deeply hostile" to the 40% tax.

The ABC reports the mining industry will fight the new tax. The Minerals Council warns the tax will drive investment overseas.