NEW RESEARCH CONFIRMS WORST FEARS ABOUT RESOURCE TAX IMPACTS
July 20, 2010
Further pressure is mounting on the Australian government to scrap its planned resources "super tax" after new independent research commissioned by the Chamber of Commerce and Industry West Australia (CCI) shows it will have a devastating impact on the local economy.
- If the tax were introduced in its current form, the research shows the Western Australian (WA) economy will be up to $60 billion smaller over the next decade than it otherwise would be; this is equivalent to the mining, construction and utilities sectors shutting down for a year.
- It also finds that there will be up to 100,000 fewer jobs, which equates to around 9 percent of the total workforce.
- In 2011, one year before the tax is scheduled to start, CCI predicts the RSPT will slash economic growth from a projected 4.25 percent to as little as 1.7 percent, costing $4.4 billion and 17,000 jobs.
- It will cost the WA economy as much as a further $5.6 billion in 2012 and $6.7 billion in 2013, with 40,000 fewer jobs over these two years.
Australia's new prime minister, Julia Gillard, is aware of the research released by the CCI but is widely expected to push for a slightly diluted version of the super profits tax. "I am throwing open the door to the mining industry," she said just last month, "and I ask that in return, the mining industry throws open its mind."
Her first decision as prime minister needs to be to scrap the proposed resources super profits tax that is already damaging WA's economy, says James Pearson, chief executive of the CCI.
Source: James Pearson, "New research confirms worst fears about resource tax impacts," Chamber of Commerce and Industry West Australia, June 24, 2010.
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