A proposed 40% Resource Super Profits Tax on mining in Australia 'jeopardises' a 'growth story that has benefited all Australians', claims Brendan Pearson, Deputy Chief Executive of the Minerals Council of Australia.

In a statement issued on 11 May, Pearson raises concerns about the Australian Treasurer's plans, which he says could reduce investment, job opportunities and weaken export growth, just when the benefits of the 'mining boom' are being realised in the form of new roads, schools and hospitals.

The Treasurer announced the policy on 2 May as a 'fair return to the nation', with the launch of a Resource Tax Consultation Panel to engage with all stakeholders on a levy that is due to be applied from 1 July 2012.

Pearson says, 'The 2010-11 Budget relies on strong commodity prices and exports, a mining-led recovery in private investment and higher commodity tax receipts to accelerate deficit reduction and to fund new spending initiatives. The Budget shows the mining industry [therefore] is already delivering a strong dividend for Australia and there is no need for a new tax, especially one set so high that it threatens the competitiveness of Australia's most important export sector'.

He adds, 'The Federal Budget papers confirm the Government has locked in the key features of its super tax on mining, including the 40% rate. The consultation appears to little more than window dressing. It is essential the Government reconsider its approach to consultation'.

Xstrata Copper's North Queensland Division has already suspended its regional exploration programme in response to the proposals. The venture had planned expenditure of around AUS$30m over the next three years.

To contribute your thoughts on this tax of mining profits, visit our forum.

Further information: Treasurer, Minerals Council of Australia and Xstrata