Mining Super Tax scrapped? Perhaps sanity will return

The backlash against the mining super tax proposed in Australia I referred to here in an earlier post seems to have contributed to the exit of the Australian Prime Minister.

The Australian reports

Stocks, dollar rise on Rudd’s exit

AUSTRALIAN financial markets have reacted positively to the Labor leadership spill, with expectations new Prime Minister Julia Gillard will overhaul the controversial resource super-profit tax (RSPT).

“We understand that Gillard is a supporter of the RSPT, the current proposal following the Henry Review was largely drafted by Rudd and Swan,” Ms Ong said.

“Given the backlash from the business community and limited public support, the new leadership team is a good excuse to change the RSPT in its current form.

“We expect the new PM to announce a watered down version of the RSPT in the coming weeks. The most likely changes will probably be to the uplift the rate, tax rebate on losses over the investment life of projects, and concessions for particular commodities although we would not rule out any tinkering to the proposed 40 per cent rate of tax.

“There is also the outside chance that the RSPT is dumped all together. This, however, would be poor long term macro policy as political survival dictates.”

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