Mining tax hurting investment in SA, says Geoff Knight

THE head of the South Australian Resources Department has slammed the mining tax as a badly designed policy.

THE head of the South Australian Resources Department has slammed the mining tax as a badly designed policy that increases Australia's sovereign risk, unfairly punishes the mining sector, damages business and investor confidence, and creates a sense of division within the community.

Geoff Knight, chief executive of the Department of Manufacturing, Innovation, Trade, Resources and Energy, said he had seen an adverse impact across the investment landscape since the introduction of the Gillard government tax.

“I travel trying to promote interest in investing in South Australia and the introduction of the mining tax has certainly increased our sovereign risk,'' Mr Knight said yesterday.

“I get quite angry about perceptions that seem to be out there in the Australian community that the mining industry doesn't pay its fair share of tax -- I get as angry as anyone about that, because it is simply untrue.''

In a swipe at the way Wayne Swan and Julia Gillard had dealt with the big miners, Mr Knight said the resources states had tried to foster investment and not punish those who were successful.

“What we've been trying to do is create an environment and a climate where miners and explorers and developers are rewarded and encouraged to invest -- it is a very high-risk business -- rather than being punished for what they're doing, and I don't believe it's appropriate to punish people for being successful,'' he said.

“There's been an attempt to try and create a sense of division in Australian society with this idea that miners have somehow unfairly got access to Australia's riches and that's kind of disappearing offshore.

“The mining industry's position during the debate on the super tax did demonstrate that miners' retained earnings and profits were reinvested in Australia, creating jobs and more work for Australians.

“One of the reasons why the government had to step back from that was because they realised that most Australians know someone that works in the mining industry or benefits directly from the mining industry and that whole mythology was unravelled.'' He said the tax was “fairly badly designed''.

Mr Knight, who also said his department could do with more resources to “accelerate the approvals process'' for miners, made his remarks during a panel discussion in Adelaide yesterday at a resources business luncheon hosted by the American Chamber of Commerce.