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New Mines Minister won’t budge on Mining Tax

In his first announcement since becoming the new Federal Resources Minister on Monday, Gary Gray, said he has no intention of making changes to the existing mineral resources rent tax (MRRT).

The new Minister was in the role only a matter of hours before making the announcement to ABC’s Lateline program on Monday night.

The West Australian MP was handed the mining portfolio by Prime Minister Gillard late Monday morning after last week’s spectacularly mis-managed Labor party leadership coup resulted in the resignation of former Resources Minister, Martin Ferguson.

Gray, a former Woodside Petroleum executive, said the government made a poor job of selling the tax when it was first introduced but, from now until the election just five months away, it would be “business as usual”.

“The way in which it was introduced was less than perfect,” he said.

“But understanding now that with the [mineral resources rent tax] and with the increases in royalties, we now have a minerals sector that’s contributing to the coffers of state and federal governments in a way that has never happened before.”

Gray’s comments come after Liberal Senator, Mathias Cormann, called on the new Minister to scrap the mining tax.

On Friday, former Minister, Martin Ferguson, labeled the tax a “mess” of the federal government’s own making, because it had failed to consult with the industry.

“Labor’s widely discredited mining tax is a bad tax which came out of a bad process,” Senator Cormann said.

“Even his highly regarded predecessor agrees. Sadly he waited until his departure from the resources portfolio before taking people into his confidence on that.”

During his Lateline interview, Gray conceded that growing costs were a significant concern for the industry.

“I think it’s right to say that as we look to the future for our extractive industries, we see price uncertainty, some softening in markets and that’s been well and truly flagged both by analysts but also by the Australian Government over the course of the last four or five years,” he said.

“Our need to continue increasing our volumes means that we do have to ensure that cost pressures are kept to a minimum so that we can ensure a profitable mining sector.”

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