BHP MD warning on Resources Rent Tax

In today’s Sydney Morning Herald, BHP managing director Marius Kloppers warned against a rumored resources rent tax at a Sydney briefing on the group’s profit.

The possibility of a resources rent tax on minerals, to replace state-based royalties, is believed to be a key recommendation in Treasury secretary Ken Henry's review of the tax system.

But Mr Kloppers warned that ''fiscal stability is a very important thing'' to an industry that is helping Australia invest its way out of the economic slump.

Without specifically referring to the Henry tax review, Mr Kloppers said mining companies had a ''reasonable expectation that things are not going to change'' throughout the life of assets that had attracted investment in the first place. ''This is an extraordinarily important thing,'' he said. 

Mr Kloppers said other countries that had ''tinkered'' with fiscal regimes had lost investment over 10 and 20-year time frames and that the ''most important driver of overall return for a country is always growth and investment''. He said Latin America took decades to recover from the investment drought that followed the wave of nationalisations in the 1970s.

Read the SMH article here.