Australian parliament passes mining tax

Gillard had to rely on support from the Green Party to secure the mining tax vote [EPA]

Australia’s plan to impose a 30 per cent tax on its mining sector has cleared its biggest political hurdle after passing through the lower house of parliament.

The Minerals Resource Rent Tax Bill, which will tax coal and iron profits, passed with 73 votes to 71, following support from the Green Party.

It will go to the upper senate early next year, where it is expected to be approved.

The vote is a major victory for Prime Minister Julia Gillard’s Labour Party after 18 months of acrimonious debate that brought down Kevin Rudd, her predecessor.

If the bill becomes law, mining companies will have to pay about $10.8bn in charges in the first three years of the tax.

The government says the new law will help spread the benefits of Australia’s resources boom to other parts of the
economy struggling with the global downturn.

“This is a way in which all Australians share in the bounty of the mining boom,” said treasurer and deputy prime minister Wayne Swan.

The tax will hit about 30 of the country’s biggest miners. Although it is set at 30 per cent, it will have an effective rate of 22.5 per cent when special mining-industry tax allowances are taken into account.

The government said the tax would not hurt Australia’s record investment in mining but faced opposition from the Conservative opposition.

Australia’s iron ore exports rose to a record high in September of $6.15bn, with the biggest demand coming from China and India.