Shortfall 'no surprise' to Fortescue executive
Treasury's inability to predict crucial aspects of the mining tax process is no surprise, according to a senior executive from Fortescue Metals Group.
Speaking at a Senate inquiry into the mining tax, Fortescue's chief financial officer, Stephen Pearce, said it had taken the company several years to work out what its own shelter from the tax would be under the "incredibly" complicated system.
His comments were in response to last week's admission from Treasury secretary Martin Parkinson that his inability to see the size of the deductions being claimed by big miners was the reason for Treasury's wildly inaccurate forecasts over the amount of revenue the tax would deliver.
"I'm not surprised they couldn't see it ... it has been very hard for us to see it," Mr Pearce said on Monday.
Treasury forecast the mining tax would deliver $2 billion to the government by June 30 this year, yet the tax had delivered just $126 million by December 31.
The shortfall appears to be due to lower commodity prices and multi-billion dollar deductions the miners are claiming for money spent building the mines before the tax was implemented.
The right to claim a "deferred tax asset" was included in the tax to ensure it was not acting retrospectively on companies, but the measure looks set to undermine both revenue flows and the credibility of the tax.
Mr Pearce said Fortescue had an "unrecognised tax benefit" of about $3.5 billion, which would help to ensure the company does not pay any mining tax in the "forseeable future".