(EnergyAsia, May 11 2011, Wednesday) — Any additional taxes on Australia’s resources sector must be designed so they do not damage its international
competitiveness, said an adviser to South Australia state government.

Speaking at the Paydirt 2011 South Australian Resources & Energy Investment Conference in Adelaide, Minerals and Petroleum Experts Group chairman, Ian Gould, said the industry was almost overwhelmed last year by the unexpected super profits mining tax proposal – a tax which would have been disastrous for further mining development in South Australia in particular.

Dr Gould said: “It is unfortunate that in the hurly burly of the mining tax debate since then, and the campaigns to minimise its collateral damage, the community has been left with an impression that the resources industry has not paid its way on taxation, whilst it has actually been a prodigious re-investor in Australia.

“Broad community support is essential for this key Australian export sector and any erosion of confidence will ultimately hurt all Australians.

“What we have seen since the tax’s first proposal is the morphing of the super profits tax into a more generally (but not universally) accepted resource rent tax only on significant profitable producers of coal, petroleum (gas) and iron ore.

“The challenge will be to ensure this tax does not distort competitiveness in the value adding extensions of our minerals and energy industries.”

He said there is the additional risk of a proposed carbon tax, which when combined with renewable energy targets and greater use of gas, will increase the real cost of energy in Australia – despite good intentions and any elaborate compensation schemes.

Dr Gould said the mining and resource sector already pays royalties and provides employment, while investing in services and training, and developing infrastructure.

He warned that development of a mine or energy project at any cost could not be a socially enduring approach – and rigorous, expert and transparent regulatory processes to assess environmental and community impacts, were essential.