VLPA Update (Issue 51)

PETER MCCLUSKEY from the Victoria Limestone Producers Association reports on the impacts of the RSPT.

THE Resources Super Profits Tax (RSPT) is the big issue at the moment we are liaising with other industry associations including CMPA , National Aglime Association and Limestone Association of Australia regularly to achieve maximum impact with our opposition to the tax.

In short if applied to extractive industries, it would be a tax not only on us but the whole economy when the Government is asserting that by collecting a tax on extractives it would improve economic welfare.

VLPA was represented by Trevor Tovey and Peter McCluskey at the Treasury consultation seminar in Melbourne on 31 May. Peter had a one on one meeting with Treasury later in the day to explain our position in detail, how the industry is structured and how State regulations apply in Victoria.

Significant points of interest to come out of VLPA’s questions on the day were that extractive products were added in post-Henry due to the possibility of price spikes in these minerals such as occurs with gold, coal and iron ore. As shown in our submission it would be such an unlikely happening it should not be entertained. Also it was apparent the effect on the CPI of extractives being included has not been demonstrated at government level.

The main points of the VLPA submission to the Treasury consultation panel are reproduced below.

Limestone for agricultural application is a natural product mined, quarried, processed and almost totally consumed domestically mainly as a soil conditioner to combat acidic soils which are estimated to be costing $300m annually nationwide in lost agricultural production.

Application of lime can improve soil productivity up to 20%.

The VLPA considers a Resources Super Tax (RSPT) would be counterproductive to economic growth for the following reasons if applied to our industry:

• Almost all our industry’s production is consumed domestically, hence any additional impost would be passed down the supply chain;
• Our product is not the subject of international price agreements with assured margins such as are large scale mineral exports, but is generally traded in competition in domestic markets and subject to seasonal climatic fluctuations, and hence peaks and troughs in viability over time;
• Favourable taxation treatment of new projects is far from a catalyst to undertaking such projects as many barriers to entry occur at State level including costly drawn out planning processes, infrastructure provisions, regulations and weather restrictions;
• Additional tax on lime is counterproductive to Federal Government expenditure on “Caring For Our Country” program which includes promoting improved soil productivity through greater use of lime.

As highlighted elsewhere in this issue the truck rally in Bendigo was a huge success in drawing attention to the harmful effect on the industry and the community should the RSPT be imposed on the likes of our industry. A number of VLPA members were very visible at the rally with apologies being received from others who were unable to attend.

Stand by for further developments on this issue and hopefully the Government will start to see sense and at least drop extractives off the agenda.

For further information contact Peter McCluskey 0408 496 588.

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