Fortescue asks Gillard to invite Greens on MRRT talks, reiterates grave reservations on proposed tax
Fortescue Metals Group Ltd (ASX: FMG) chief executive Andrew Forrest said on Thursday that Prime Minister Julia Gillard should invite Greens head Bob Brown in the event that fresh discussions would again be conducted on the revised mining tax.
Mr Forrest said that Senator Brown appeared to be misguided when he insisted in April that the mining tax should carry a headline rate of 50 percent instead of the 30 percent proposed by the Gillard government on its planned mineral resource rent tax, adding that the senator must have been clueless of the benefits that he is now enjoying because of the mining industry.
The Fortescue executive was also quick to criticise the proposed MRRT, arguing that his firm and other smaller companies were not even consulted by the government when it focused its negotiations with mining giants such as BHP Billiton Ltd, Rio Tinto Ltd and Xstrata.
Mr Forrest said that they deserve better than being advised by Ms Gillard to meet with a committee once the election is over, as he asserted that "the rest of the Australian mining industry, which is working to deliver the major job growth opportunities for all Australians, has not had a word of consultation but is being asked to believe that everything will be dealt with after the election."
He said that such words would not suffice for the smaller iron ore and coal miners who are nursing major concerns on the design of the MRRT and its actual capability to raise the targeted $10.5 billion, asking the question "If it fails to achieve that revenue, where will the money come from?"
Mr Forrest could only surmise that the government would be forced to re-engineer the tax proposal once its present form would prove to be a failure, which should lead to greater pressure for the iron ore and coal mining industry for more revenues to be collected by the government.
The Fortescue head said that the government would need to revisit its "treatment of infrastructure in calculating taxable profit and in the starting base," as he added that the MRRT must carry a provision that would jack up the uplift rate in order to reflect the actual costs of finance and magnetite iron ore to be excluded from the proposed tax.