Peter Watt believes the new mining tax would hurt his business and others like it – as well as their customers – if it goes ahead.
Peter Watt believes the new mining tax would hurt his business and others like it – as well as their customers – if it goes ahead.

Super tax risk to local industries

FORGET about the impact of the Rudd Government’s new mining super tax on the top end of town – the kids’ sandpit could become an expensive luxury if the controversial plan goes ahead.

With the 40 per cent “super profit” tax set to apply to small regional quarries as well as the export mining sector, local operators could find themselves forced to pay up, passing on the added cost to their customers.

The move could put up to 300 jobs in the Warwick area at risk, with the local mining and quarrying industry contributing about $23 million to our economy each year.

Among those who could be slugged with the new tax are Unimin Australia – which produces lime at its Elbow Valley site – as well as local quarries and sand and gravel suppliers.

Warwick Chamber of Commerce president John Randall has hit out at the move, announced in the new Federal Budget this month, saying the Resource Super-Profit Tax will cost not only Warwick businesses, but also the general community.

“The new tax out of the 2010 Budget is levied on all types of quarry industries producing sand, gravel, cement, sandstone and limestone,” Mr Randall told the Daily News.

“The new tax is not just a tax on the big multinationals like BHP and Rio Tinto.”

He said it could also affect small, family-run businesses.

“Warwick has several well-run quarrying businesses producing sand, gravel, deco, road base, sandstone and limestone for our region,” Mr Randall said.

“If business owners get hit by this new tax, they will have to pass it on and that means increases in a huge range of costs, including the cost of building a home in Warwick.

“This would be because of higher concrete costs and increases in the cost of landscaping supplies.

“It will hit everyone, even down to filling up the kids’ sandpit.”

Mr Randall pointed out that some of our local quarries are “such good operators” that they can even export their high-quality material to Asia, the Middle East, and the Sunshine and Gold coasts.

He said he was also concerned about the possible effects on the local farming community, still badly affected by the drought.

“THE new tax could also affect our farmers, with increasing costs of fertiliser such as lime, gypsum and superphosphate, all of which come out of quarries,” Mr Randall said.

While Treasurer Wayne Swan hinted at the weekend at a possible backdown on applying the tax to quarries – after being adamant earlier in the week there would be no exceptions – local operators remain sceptical.

Peter Watt, of Warwick Sand and Gravel Supplies, told the Daily News he and others in the sector remained uncertain about what the full impact on their bottom line would be if the tax was imposed.

“Well, it’s a concern for all of us, definitely. It’s unbelievable,” Mr Watt said.

“I’ve been here seven years and I employ two full-timers – but it would be the effect on the wider economy and not just us.

“But at this stage I’m like everyone else. We’re just pretty much in the dark about it.”

The views of Mr Watt – who is at the end of the supply chain – were echoed by a Warwick region quarry operator who declined to be identified but said it was “an uncertain time”.

“You put a 40 per cent tax on top of everything else that is a cost to our business as it is and you’re looking at jobs being in jeopardy,” the operator said.

“The cost of everything will go up: building materials, landscaping, labour.”

The Rudd Government has defended the mining tax on the basis of the massive profits being reaped in the mining sector, which, it claims, are not flowing back to the wider community.

The tax

The Resources Super Profit Tax would take effect in 2012 and is forecast to increase the tax paid by the mining industry by about $12 billion in its first two years.

The tax would target any profit that’s more than six per cent – or about the return anyone could make from a term deposit at a bank.


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