TREASURER Wayne Swan has staunchly defended the Rudd Government's planned super profits resource tax as mining companies ramp up their opposition to the move.
The Government, in response to the Henry tax review, wants to slug mining companies with a 40 per cent tax.
Mr Swan said the Federal Government was replacing an inefficient royalty regime which penalised mines, miners and shareholders.
"The regime we are talking about putting in place is a profits-based tax and of course when companies are much more profitable the return to the Australian people is higher," he said today.
"But when profits are lower this is a tax which encourages many of those mines that have been punished and penalised by an archaic and unfair royalties regime."
Mining industry bosses, including Fortescue Metals Group chief Andrew Forrest have banded together to oppose the tax, saying it will not only harm mining but will harm Australian families.
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Mr Forrest said today all Australian mining projects which required substantial capital, including Fortescue, would be under review.
Queensland based mining magnate Clive Palmer has also been openly critical of the tax.
Mr Swan said the Government's plan was reasonable.
"We are putting in place a set of arrangements which are reasonable, which we believe will return to the owners of the resource, that is the Australian people a fair share which has fallen away dramatically in recent years," Mr Swan said.
"There have been one or two owners of mines out there making all sorts of extreme and hysterical statements."
Mr Swan said the Government would have been derelict in its duty had it not responded to the Henry review recommendation relating to the tax.
The nation's mineral resource was owned by the people of Australia, not the mining companies, he said.
"There is nothing new in this country about a 40 per cent profits-based tax," he said, adding there was already a similar tax on petroleum resource profits.
Mr Swan said there was no certainty for mining companies under present royalty arrangements because state governments could jack up their regimes.
The Minerals Council of Australia launched a print advertising campaign today stating the industry had paid $80 billion in taxes during the past decade and declaring "that's a fair share".
The council was quick to label the resources tax a revenue grab rather than taxation reform.
Mr Swan was not moved by the campaign.
"Never forget it was the council itself that made a submission to the independent tax inquiry suggesting the resources tax be replaced with a profits-based tax," he said.
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