BHP Billiton, the world’s largest miner, said yesterday the federal government’s proposed resources super profits tax must apply only to new investments and any tax reform should not disadvantage the resources industry relative to other industries.
In his first letter to shareholders, BHP’s new chairman Jac Nasser said the company had no issue with a review and reform of Australia’s tax system.
But he said any reform must be conducted on sound principles and not destroy incentives to keep investing in the resources industry.
”Any reform must only apply to new investments: not to existing investments,” he told shareholders.
"Additionally, any reform should not disadvantage the resources industry compared to other industries in Australia, and it absolutely must not disadvantage the Australian resources industry compared to other countries."
The letter was released as BHP’s shares were falling on market.
They lost more than 4.5% on the day, or over $1.70 to end at $36.89, the lowest close since last November.
Rio Tinto shares were also weak, down 5.6% or $3.85 to $64.15.
BHP said the RSPT would see the total effective tax rate on the company’s Australian profits increase from 43% to 57%, making the Australian resources industry the highest taxed in the world.
This compares to a tax rate of 23% in Canada and between 27% and 38% in Brazil, Mr Nasser said.
”The proposed super tax fundamentally, abruptly and unfairly changes the rules of the game,” he said in the letter.
The proposed RSPT would ”seriously threaten Australia’s competitiveness, jeopardise future investments and adversely affect the future wealth and standard of living of all Australians,” BHP said.
As well, it would ”unfairly impact communities and working families across regional Australia.”
BHP said there was an over-riding risk ”that Australia could now be seen by the rest of the world as a less stable and less competitive place for long term investments.
