COLUMN-New iron ore tax on Rio, BHP unlikely, but issue is back: Russell
(The opinions expressed here are those of the author, a columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia Aug 11 (Reuters) - Here we go again! Another political attempt rooted more in populism than economics to grab more tax revenue from Australia's top iron ore miners, Rio Tinto and BHP Billiton.
There are two likely outcomes from the moves by a minor, but potentially king-making, party in Western Australia state to about double the amount the world's second- and third-ranked iron ore miners pay in royalties.
The first is that the tax hike is extremely unlikely to succeed in the form proposed by Brendon Grylls, the newly-installed leader of the National Party in Western Australia (WA).
The second is that raising taxes on Rio and BHP is now firmly back on the agenda, and this boosts the likelihood that some form of tax increase will be legislated.
However, before that point, expect a political bunfight that will rival the last time an Australian government tried to impose higher taxes on the mining industry.
That attempt in 2010 contributed to the axing by his own party of former prime minister Kevin Rudd.
Although his successor Julia Gillard did manage to pass a watered down version called the Minerals Resource Rent Tax (MRRT), this was scrapped when her Labor Party lost power to the Liberal Party in 2013 as part of a campaign promise. Continuación...