Fed govt's tax moves questioned

Fed govt's tax moves questioned

Questions have been raised about the impact Australia's tax regime is having on investment by resources companies at a conference in Darwin.

DARWIN, AAP - An energy conference in Darwin has heard conflicting accounts of whether Australia's tax system deters companies seeking to invest in Australian resources projects.

At day two of the South East Asia Australia Offshore Conference (SEAAOC) Tom Creeger, the Australian head of US Energy giant ConocoPhillips, said he feared the actions of the federal government's Business Tax Working Group would make the country less competitive.

"A key concern has been the Commonwealth's Business Tax Working Group, which has been looking at ways to undertake tax reform possibly at the expense of the resources industry," Mr Creeger told the conference in Darwin.

He said if Australia wanted to remain competitive it needed ongoing policy support from the Commonwealth, with innovative, flexible government policies conducive to investment.

"Accelerated appreciation and immediate deductibility of exploration expenditure are key to ensuring LNG projects, like our industry, continue to be developed in Australia and should be supported where possible," he said.

He said the carbon tax and the high Australian dollar would challenge his company's decisions when expansions had to be made.

ConocoPhillips owns a major stake in the $US20 billion Australia Pacific Liquefied Natural Gas (APLNG) project in Queensland, and major acreage in the Timor Sea and offshore from Western Australia.

"Rising costs have the potential to put the brakes on Australian development," he said.

His views were backed up by Northern Territory Chief Minister Terry Mills who said the carbon tax was bad for investment. "It is a tax on growth and remoteness and it is a tax on jobs," Mr Mills said.

But in another presentation, Commonwealth Bank chief economist Michael Blyth said research showed Australia was the top country in the world to invest resources projects in, and would remain so even if tax conditions became less competitive. He showed a league table of different countries standing on attracting resources projects, determined by interviewing company decision makers.

Australia had 57 points out of 70, ahead of Canada in second place on 52 points.

Mr Blyth said if Australia's score on taxation policies (currently at five out of 10) was to drop to the lowest rating of one, Australia would still rank as the best place in the world to invest in resources projects.

"So even with the worst taxation regime in the world there are still a lot of factors in Australia that miners find quite attractive," he said.

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Tags resources companiesBusiness Tax Working Group

More about AAPCommonwealth Bank of AustraliaUS Energy

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