The Australian Government is set to scrap its 30% tax on coal and iron-ore profits made by mining firms, after it successfully repealed the Minerals Resource Rent Tax (MRRT) in the upper-house senate, with support from six crossbenchers, including Palmer United Party (PUP).
Australia Finance Minister Mathias Cormann said: "The government has received indications from a majority of senators in this chamber that they will support our mining tax repeal package.
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"If this bill is supported by the Senate, it means that the mining tax will be gone."
The latest amendments include delaying any compulsory increases to employers’ superannuation contributions until 2021, retaining the low income superannuation contribution until 31 June 2017, retaining the income support bonus until 31 December 2016, and retaining the schoolkids bonus until 31 December 2016.
According to Cormann, the passage of mining tax would add $10bn to the budget bottom line in the next four years.
Cormann said: "This is not an adverse, unexpected change as it will leave Australian workers with more of their own money pre-retirement, which they can spend on paying down their mortgage, spend on other matters or save for their retirement through superannuation as they see fit.
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By GlobalData"It will also reduce the cost of doing business, helping business employ more Australians."
The bill will now move to the House of Representatives for approval.
The tax was originally introduced by the former Labor government in 2012, aimed at promoting welfare programmes, including pensions.
The Minerals Council of Australia (MCA) has welcomed the move saying that it will help the country regain its status as competitive producer and ‘an attractive destination for mining investment’.
MCA said in a statement: "The MRRT was based on the false premise that the mining industry was not paying its fair share of tax through the Millennium Mining Boom.
"It added a third, complex and unnecessary layer of tax on coal and iron ore companies, on top of Federal company tax (itself a profits-based tax) and state royalties."
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