The government has warned it may have to forego company tax cuts and higher superannuation contributions to offset any loss of revenue from a likely deal with mining companies over the resource super profits tax.
The government is sticking firm to its commitment of returning the budget to surplus within three years, with plans to use some of the revenue from the tax to help pay down the current deficit of $57.1 billion.
“We won’t compromise the budget moving back into surplus in three years,” Assistant Treasurer Nick Sherry told ABC Radio on Thursday.
He warned there be may “an adjustment” to other elements of the government’s tax package, of which the super profits tax was part.
Those other elements include cutting the company tax rate from 30 per cent to 28 per cent, and lifting compulsory superannuation contributions from nine to 12 per cent.
Business is concerned company tax cuts will be a casualty of any deal, while the superannuation component is retained.
The prospects for a modified version of the tax strengthened on Thursday with Treasurer Wayne Swan again indicating the government’s willingness to negotiate with miners.
“I don’t intend to put any boundaries around those discussions,” he told Fairfax Radio Network.
The opposition has no intention of supporting a deal, saying it will rescind the tax if it wins power at the next election.
“It will be a deal done with the government holding a gun to the miners’ head,” opposition resources spokesman Ian Macfarlane said.
It was “almost impossible” to imagine any sort of deal which did not leave the mining industry less competitive internationally.
“On that basis alone we would rescind the tax.”
Mr Macfarlane rejected claims by mining magnate Andrew Forrest that ousted prime minister Kevin Rudd Rudd was ready to announce an acceptable compromise on Friday, the day after he was toppled by Julia Gillard.
The terms of the compromise were “completely unacceptable” to junior and mid-cap miners.
“While Andrew may have one view, it’s not the view of the industry,” Mr Macfarlane said.