Mining companies in Australia will have their profits hit by the launch of the controversial 22.5% Minerals Resource Rent Tax (MRRT).
The tax is aimed at balancing the economy after a mining bonanza that has provided much of the raw materials for the huge growth in Asia Pacific economies.
Australia is the world’s leading supplier of special coals and cokes for fuelling electric power stations, smelting iron ore and other industrial process.
The big customers have been South Korea and China, whose industrial output has surged on the back of Australian commodities.
MRRT is expected to raise US$13.7 billion by 2015-16 and will provide the cash to fund benefits for families and business outside of mining.
The tax resulted in bitter political argument between the government and opposition over claims the economy is too finely balanced to risk edging out mining companies.
The mining boom generates big profits for companies, while keeping the cost of imports down while pushing the Australian dollar rate higher.
Some Australian families with two or more children could be inline for an extra AUS$600 a year from the government as a result of the tax.
The government is also funnelling some of the money raised from MRRT in to financial support for businesses to spend on training, capital investment in a bid to improve competitiveness.
Another 11,000 firms are expected to gain from new loss carry-back provisions that will let firms set off up to AUS$1 million against tax paid in earlier years.
The mining industry argues the tax is unfair, especially as the sector brings in AUS$154 billion a year and is also facing paying out for a new carbon credit levy that takes the effective corporation tax rate up to 54%.
