Australia gov't says mine tax will pass Parliament

CANBERRA, Australia (AP) — The Australian government said Tuesday it is confident it will get sufficient support to enact a new 30 percent tax on mining companies whose profits are booming largely due to Chinese demand.

The Labor Party government wants to impose the tax on mining giants like BHP Billiton, Rio Tinto and Xtrata starting July 1 to take a bigger slice of the current resource boom windfall.

The expected 11 billion Australian dollars ($11 billion) in tax revenue over three years would be used to reduce taxes on other companies and help the government reach its target of returning the national budget to surplus in the next fiscal year.

Finance Minister Penny Wong said the government will satisfy the competing demands of the minority Greens party and independent lawmaker Andrew Wilkie, whose support is crucial for passage of the legislation this week.

Wilkie wants the income threshold for mining companies raised, but the Greens say they won't support the bill if that reduces tax revenue.

"We have made it clear to the government we want that AU$20 million going to schools, going to hospitals, going to public transport — not to these wealthy mining corporations largely owned overseas," Greens leader Bob Brown told reporters, referring to the annual cost of raising the income threshold.

The conservative opposition refuses to support the tax, arguing that it would drive mining investment overseas and cost thousands of Australian jobs.

The new tax would replace the current state-by-state royalties system in which miners are charged for the volumes of minerals that they extract without reference to the soaring market values of those minerals.

China is Australia's biggest export market and high prices paid for iron ore and coal is providing Australia with its largest monthly trade surpluses in its history.

Chinese demand has driven the price of iron ore up 23 percent a year since 2005 and coal by 8 percent a year. Australian export volumes of iron ore and coal have grown at 10 and 5 percent respectively a year as the Chinese manufacturing sector grows.