Tuesday, 25 October 2011

Carbon tax an Australian burden: BlackRock aap

Carbon tax an Australian burden: BlackRock

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On Tuesday 25 October 2011, 14:28 EST
Australia's carbon tax and minerals resources rent tax (MRRT) have helped make the country a less favoured destination for mining investment, says one of the world's largest resources investment managers, BlackRock.
Australia has dropped down the list of favoured mining destinations relative to its historical position because of the uncertainty around the tax changes over the last few years, BlackRock said on Tuesday.
The head of BlackRock's natural resources equity team, Evy Hambro, said: "These are two new burdens that are having to be shouldered by resource companies on the projects that they are going to be build into the future."
Mr Hambro said changes on issues such as tax needed to be made in consultation with companies to ensure that they did not threaten investment.
He said there was a general trend around the world of "resource nationalism", with governments who were short on tax revenue looking for new sources of money.
Mr Hambro said Australia had had a very stable fiscal regime for much of the last decade.
"To suddenly have the surprise move in an unconsulted fashion on the original resources rent tax proposals was not welcomed at all, and, obviously, had a bearing on re-investment attached back into projects within the country," Mr Hambro said.
"If governments can find a way to reduce uncertainty around these kind of measures, it would have a big impact on increasing management's comfort with putting capital to work in a country."
He added all governments should avoid following extreme paths of indigenisation or nationalisation of industry as is proposed by President Robert Mugabe in Zimbabwe or President Hugo Chavez in Venezuela.

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