Mining billionaire Andrew Forrest has claimed the mining tax will raise between nothing and $50 million from his company, Fortescue Metals Group, during the first five years of the levy.
MINING billionaire Andrew Forrest has claimed the mining tax will raise between nothing and $50 million from his company, Fortescue Metals Group, during the first five years of the levy.
With critics saying proceeds from the tax will fall well short of revenue targets, Mr Forrest yesterday stepped up his attack on the government, blasting forecasts that it will raise $10.6 billion as a ''charade''.
He also escalated his war of words with the Treasurer, Wayne Swan, who has accused Mr Forrest of using his wealth and influence to pursue vested interests.
''I would say we will pay between zero and $50 million of MRRT [minerals resource rent tax] some time in the next five years - I am not sure when it is and it will depend on iron ore prices. But will it raise the $10 billion? No,'' Mr Forrest said at the National Press Club in Canberra.
If accurate, the prediction suggests Fortescue would receive hefty concessions under the tax. Stockbrokers expect the company's pre-tax profits to exceed $20 billion in the next five years.
Mr Forrest's prediction is the latest blow to the government's forecasts after the chief executive of BHP Billiton, Marius Kloppers, last month said it was ''impossible'' to say how much mining tax it would pay. Treasury expects that BHP, Rio Tinto and Xstrata - which helped design the tax - will pay 90 per cent of the tax between them.
However, Mr Forrest said the multinational miners had ''fleeced'' the government in the secret talks, which took place after Labor dumped Kevin Rudd as prime minister in mid-2010.
Mr Forrest has threatened to challenge the mining tax in the High Court.
Mr Forrest, whose speech was about improving employment among indigenous Australians, also blamed the federal government for the weak condition of the economy, saying its decisions had made businesses more uncertain.
Asked if he would consider entering federal politics, after billionaire miner Clive Palmer this week sought preselection to run in Mr Swan's electorate, Mr Forrest said: ''I would be surprised if Mr Swan contests that seat because I think a three-legged dog would beat him to it.''
A spokesman for Mr Swan said Mr Forrest, and the opposition, did not ''want Australians to share in the benefits of the resources that we all own''.
''They can stand up for vested interests and their mining profits the government will keep standing up for working Australians by using the mining boom to increase superannuation, tax breaks for small businesses and invest huge amounts in infrastructure,'' the spokesman said.
Frequently Asked Questions about this Article…
What did Andrew Forrest say about how much Fortescue will pay under the mining tax?
Andrew Forrest told the National Press Club that Fortescue Metals Group could pay between zero and $50 million in mining tax (the MRRT) over the next five years. He said the amount would depend on iron ore prices and dismissed government claims that the tax would raise around $10.6 billion.
What is the minerals resource rent tax (MRRT) and how much revenue did the government forecast?
The article refers to the minerals resource rent tax (MRRT) as the mining tax under debate. The government had forecast the tax would raise about $10.6 billion, a figure questioned by mining bosses like Andrew Forrest.
Which mining companies did Treasury expect to pay most of the mining tax?
According to the article, Treasury expected BHP Billiton, Rio Tinto and Xstrata to contribute the bulk of the MRRT, estimating those three would pay about 90% of the tax between them.
Do mining chiefs agree on how much their companies will pay in mining tax?
No — there is disagreement and uncertainty. Andrew Forrest said Fortescue’s liability could be as low as zero, while BHP Billiton’s chief executive, Marius Kloppers, said it was 'impossible' to say how much his company would pay. That uncertainty is a key theme in the article.
Has Fortescue threatened legal action over the mining tax?
Yes. The article says Andrew Forrest has threatened to challenge the mining tax in the High Court.
How could the mining tax debate affect everyday investors in mining stocks?
The article highlights uncertainty around tax liabilities and government revenue forecasts, which can affect investor expectations. For example, stockbrokers expect Fortescue’s pre-tax profits could exceed $20 billion over five years, but Forrest says the company might pay very little MRRT — such contrasts can create volatility and make it important for investors to watch iron ore prices, company profit guidance and any legal challenges.
What was the government’s response to criticism from mining magnates like Andrew Forrest?
A spokesman for Treasurer Wayne Swan said critics like Forrest did not want Australians to share in the benefits of national resources. The spokesman added the government would use mining boom revenue to increase superannuation, offer tax breaks for small businesses and invest heavily in infrastructure.
Did Andrew Forrest say he would consider entering federal politics?
When asked about entering federal politics, Andrew Forrest did not commit to running. He commented sardonically about Treasurer Wayne Swan’s electoral prospects — saying he would be surprised if Swan contested a seat because 'a three-legged dog would beat him to it' — and the article also notes fellow miner Clive Palmer had recently sought preselection.
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