Foreign investors cautious on Australia’s new tax
The controversial debates in the mining sector have hit Australia's reputation as a safe destination for mining investment and exploration, according to a survey.
The country's global ranking slid from 18th to 31st in the past six months among 51 mining jurisdictions in a sovereign-risk survey of 429 world mining chiefs conducted by Canada's Fraser Institute.
The average score given to the nation's states plunged from 63 per cent late last year to 41 per cent in June.
The survey was carried out at the height of the rage over the government's resource super-profits tax and is considered the most authoritative measure of sovereign risk levels for mining around the world.
While the RSPT has since been diluted, miners have warned that the uncertainty caused by the debate has hurt Australia's reputation.
The survey findings came as the prime minister last night struck at Fortescue boss Andrew Forrest over his claim the government had neglected junior miners in revising the resource levy.
Julia Gillard said the mineral resources rent tax had been announced after two months of negotiations with mining companies, large and small, although the final talks had been held only with industry giants BHP Billiton, Rio Tinto and Xstrata.
She said the Mr Forrest's demands for revisions to the RSPT in June had been met and, in some cases, exceeded.
The Fraser Institute survey revealed that the fury over the RSPT was the main reason behind Australia's lower ranking. More than half of respondents said the nation's taxation regime hindered investment.
The results of the survey emphasis the risk to Australia's reputation of poor policy and inadequate consultation said a spokesman for the Minerals Council of Australia.
Association of Mining and Exploration Companies chief executive Simon Bennison, who is campaigning to axe the MRRT on behalf of small and mid-cap mining companies, thinks Australia's ranking would only slide further.
He said global miners would only seek to invest in areas with lower taxes and better incentives for exploration.
"This is not scaremongering or rhetoric, it is further proof that the government has made a serious error in proposing this extra tax on mining that will also severely affect Australia's international competitiveness due to the imposing tax regime that will see an effective tax rate in excess of 46 per cent," Mr Bennison said.