Australia’s mining tax and CIA conspiracy

The mining tax has dominated Australia’s political landscape this week.

The Senate passed the mining tax on Monday imposing a 30 percent tax on super profits generated by mining companies from coal and iron ore. The tax revenue will be used to elevate income and pension funds of the less well-off Australians and to cut tax on small businesses.

This sent shockwaves to the mining industry which could have been rejoicing over mining boom worldwide.

Mining magnate Clive Palmer hits CIA of mining conspiracy

Queensland mining magnate Clive Palmer lashed out at the federal government and claimed the CIA is behind the mining tax as part of America’s conspiracy to kill Australia’s coal industry.

Palmer also accused the Greens as “tools” of the US government and the environmental activists group, Greenpeace, is funded by the Rockefeller Foundation.

He said he will lodge a double High Court challenge on both carbon and mining taxes.

But his accusation hits back like a boomerang.

The CIA via ABC email denied his claim prompting him to back away from inflammatory comments, Fairfax reports via SBS.

Crikey, an alternative online media said,

Now Clive Palmer again has demonstrated the eccentricity that comes from having so much money you don’t have to care what anyone thinks of you…

Palmer is doing no more than continuing Queensland’s rich tradition of conspiracy theorists, which has produced the Citizen’s Electoral Council and Pauline Hanson, to name only the most prominent of recent years. Nor is it the first time he’s accused people of being a CIA front — back in November, it was American Express who were doing the bidding of the spooks.

Palmer could probably find consolation in knowing another mining group, Fortescue Metals, confirms it has sought legal advice ahead of plans to mount a High Court challenge against the Federal Government’s mining tax, News Corp said.

Chairman Andrew Forrest of Fortescue Metals leads a protest against mining tax during Kevin Rudd’s time

Fortescue claimed the MRRT is a poorly designed tax, drafted by the big miners behind closed doors to minimise their tax exposure at the expense of the rest of the industry,” the company said in a statement.

The Government is also facing a revolt from Liberal-led mining states.

Western Australia’s Premier Colin Barnett, for one, says he will support any legal action against the tax.

Not Amused

Newly appointed Foreign Minister Bob Carr blasts Palmer’s “reckless” CIA conspiracy claims

He said the “recklessly irresponsible” claim that the CIA is sponsoring a campaign against the coal industry will trigger concern from the United States government and business community.

Carr said the comments should also make many Australians question  Palmer’s links to the Opposition. He said Palmer is very close to Opposition Leader Tony Abbott and Palmer is considered the largest donor to the Liberal Party.

Foreign Affairs Minister Bob Carr

Treasurer Wayne Swan has also denounced Palmer’s claims. He supported Carr’s claim the mining businessman “is in cahoots with Mr Abbott.”

Federal Greens leader Bob Brown has echoed the remarks of Carr and Swan saying Palmer is a life member and a major donor to the Queensland Liberal National Party.

Meanwhile, Greenpeace senior campaigner John Hepburn rejected Mr Palmer’s comments as “ludicrous”. He said Greenpeace would not accept money from any government, corporation or secret service.

The mining tax was initiated almost two years ago, floated by former Treasury boss Ken Henry. It originally proposed a 40 percent tax on super profits—a proposal that stirred an industry-wide opposition rocking the Labor Party’s leadership. It was the same tax proposal that ousted Kevin Rudd from prime ministership in 2010.

Rising to power, Prime Minister Julia Gillard negotiated a modified tax rate with BHP, Rio and Xstrata although smaller miners remain unhappy with the deal.

The Mineral Resources Rent Tax (MRRT) Bill 2011 and related bills are now ready for the governor-general’s royal assent. The mining tax will start from July 1 this year, Australian media report.

The federal government estimated the new tax will generate $11 billion in three years which will be used to elevate income of the less well-off Australians. It will boost compulsory superannuation contributions, infrastructure payment and a one per cent tax cut for business.

The Australian, however, is pessimistic over the tax. Its editorial page said:

While this newspaper recognises the benefit in ensuring that some of the revenue generated by the once-in-a-generation mining boom is secured for future generations, this tax will do little to drive reform in the slower sectors of the economy while the fastest-growing sector is slugged with a tax that could damage our competitiveness.

Opposition Leader Tony Abbott supports Palmer

I defence of Palmer, Abbott said he was a “larger than life” character.

“I think when he says that the Greens want to stop the coal industry he’s absolutely right – of course the Greens want to stop the coal industry,” Abbott told Channel 10.

Abbott is vowing to repeal the tax if he wins the next election.

Blog Link: Asian Correspondent

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Carbon tax unconstitutional, goes to high court

Mining billionaire Clive Palmer of Queensland Nickel

The carbon tax circus is not yet over.

Mining magnate Clive Palmer announced he will challenge Prime Minister Julia Gillard’s carbon tax to High Court saying it is unconstitutional.

Palmer said his legal advisers who are “all senior counsels with experience in the High Court” advised him to take legal action against the federal government on the ground of discriminating his company Queensland Nickel.  The Age  said his legal advice would be finalised next week and his company would probably lodge documents with the High Court by April.

Palmer said his lawyers advised him there were several grounds under which the carbon tax is unconstitutional. For one, he said his company was getting less compensation under the carbon tax than rivals BHP Billiton and Glencore.

A spokesman for Climate Change Minister Greg Combet, however, denied the claim saying the government was still awaiting audited data from nickel producers that would then be included in the compensation regulations.

The Age also noted Roland Burt, a principal at Macpherson and Kelley Lawyers, who singled out three potential avenues for a challenge. These include “Commonwealth external powers, the federal government’s power to impose taxes on the states, and the issue of whether tax law could be bundled up with other legislation.”

However, Burt doubts the success of the challenge:

”Clive Palmer will have some of the best legal minds in the country at his disposal and they will certainly put a powerful case….’But my guess is the government has thought about it all carefully enough to design it in a way that will probably – but by no means certainly – survive the challenge.

PM Gillard and her camp insisted that the carbon tax was strictly reviewed during its legislative development and has ”taken careful constitutional advice and legal advice at every stage.”

Greg Craven, a law professor and vice-chancellor of the Australian Catholic University, believes the carbon tax was ”inherently complicated” and ”was always going to end up in the High Court”.

It raised questions about the scope of taxation power, the rights of the states, the Commonwealth’s power to make laws binding the states, and the compulsory acquisition of property.

”If you were looking for a law that was born to be challenged, this is it, because there are billions of dollars at stake.

Andrew Bolt, one of Australia’s most influential columnists said, “ Palmer might be right and the carbon tax wrong.”

Blog Link: Asian Correspondent