Tony Abbott Warns Gov’t Will Hike Mining Tax Rate If ALP Wins 2013 Election

Although the 2013 federal election in Australia is still months away, politicians in the country are definitely paving the way for their party's victory this early. Signs of early political campaigns include promises and criticisms of other political parties in a bid to get the sympathy of voters.

On Wednesday, Coalition leader Tony Abbott sought a written assurance from Prime Minister Julia Gillard that the federal government would permanently exempt copper, gold and uranium from the mining tax set to be collected beginning July 1. He asked for the assurance because Mr Abbott said the threat of more taxes and the higher cost of doing business are preventing BHP Billiton (ASX: BHP) from pushing through with its $30-billion Olympic Dam expansion plans.

On Thursday, Mr Abbott warned that if the Australian Labor Party wins the 2013 election, the government would worsen the business climate by hiking the rate of the mining tax.

"The government, of course, will clobber other parts of the mining industry, it will increase the rate of the mining tax," 9 News quoted the Opposition leader.

"Because they need the money... they are going to increase the mining tax and that means that projects like Olympic Dam are at risk," Mr Abbott insisted.

South Australian Premier Jay Weatherill dismissed Mr Abbott's warning as empty rhetoric. "This is simply Mr Abbott feigning an interest in South Australia," the premier was quoted by 9 News.

Federal Minerals and Resources Minister Martin Ferguson pointed out that BHP's decision, scheduled to be announced by the end of 2012, rested purely on commercial considerations since federal and state government approvals are in place.

Ms Gillard likewise thumbed down the warnings of Mr Abbott.

"Suggestions that we are considering extending the coverage of the MRRT (Mineral Resources Rent Tax) are entirely baseless and just another unfounded scare campaign from our opponents," The Advertiser quoted Ms Gillard.

While BHP did not issue any comment on the political statements from both parties, it informed the Australian Stock Exchange on Wednesday that the giant miner will purchase new exploration tenements around Olympic Dam which could be seen as an indicator of BHP's commitment to the multibillion-dollar venture.