* Tax on profits will affect about 30 companies
* Victory for Prime Minister Gillard's struggling minority
* Association of smaller miners says tax will discourage
* Opposition has said it will repeal tax if it wins power
By James Grubel
CANBERRA, March 19 Australia's parliament passed
laws for a new 30 percent tax on iron ore and coal mine profits
on Monday after a bruising two-year battle with mining
companies, in a major victory for Prime Minister Julia Gillard
and her struggling minority government.
The tax will affect about 30 companies, including global
miners BHP Billiton , Rio Tinto
and Xstrata, and aims to raise about A$10.6 billion
($11.2 billion) in its first three years.
"This is indeed an historic day for economic reform, and an
historic day for a fair go in Australia," Treasurer Wayne Swan
The tax, which is being closely watched by other
resource-rich countries, is designed to spread the benefits of
Australia's resources boom to other sections of the economy by
funding a cut in the company tax rate, higher payments into
pension funds, and A$6 billion of infrastructure spending.
The bills also include measures to lift gradually compulsory
employer payments into worker pension funds from nine percent to
12 percent by mid-2019.
The laws passed through the upper house Senate with support
from the Greens, who unsuccessfully tried to increase the tax
rate to 40 percent and extend it to gold and uranium miners.
The Association of Mining and Exploration Companies, which
represents small and mid-tier miners, condemned the tax.
"The tax is simply unfair to smaller emerging miners, and is
so complex that the administrative and compliance burden on
industry and government will be extreme," association chief
executive Simon Bennison said.
"The introduction of this anti-competitive legislation in
Australia will only further push investment capital offshore,
and change our reputation as a safe place in which to invest."
The government announced the original mining tax in May
2010, sparking an angry reaction from miners who ran an
advertising campaign against it.
Opposition to the original 40 percent mining tax played a
key role in the ruling Labor Party's June 2010 decision to dump
Kevin Rudd as prime minister and replace him with Gillard.
Gillard negotiated the 30 percent mining tax with BHP
Billiton, Rio Tinto and Xstrata, but without agreement from
Australian miners such as Forestcue Metals Group, Atlas
Iron and BC Iron.
Gillard then almost lost the 2010 national elections, but
held on to power by one seat by forming a minority government
with support from the Greens and two independent members of
The next election is due in late 2013, but opinion polls
show Gillard's government well behind the opposition, which has
promised to scrap the tax if it wins office.
But Treasurer Swan, who has run a campaign criticising
Australia's biggest mining magnates, has said Australians
support the mining tax.
The mining tax policy victory follows parliament's
endorsement of a controversial carbon tax, and
laws to force global tobacco companies to use plain packages for