Mining tax hits super investments
AUSTRALIAN workers and retirees continue to be hit by Kevin Rudd’s new mining tax with more than one fifth of the value of resource stocks wiped out in the past five weeks, according to Shadow Superannuation Minister Luke Hartsuyker.
The Federal Member for Cowper said Kevin Rudd’s tax grab had undermined market confidence and made Australia a sovereign risk for many investors.
“Every Australian with a super fund or share investment is paying the price for this poorly thought-out policy. At midday on Friday, May 21, the value of resource shares had plunged $90 billion – or just over 20 per cent – since details of the tax were leaked to the press on April 13,” Mr Hartsuyker said.
“Approximately 9.3 per cent (or approximately $111 billion) of Australia’s $1.2 trillion held in superannuation assets is invested in resource stocks.
“These investments have lost a massive $23 billion since the tax was leaked and $14.9 billion since Labor’s response to the Henry Report. The Metals and Mining index has fallen to its lowest point since September 2009.”
Mr Hartsuyker said the $23 billion loss equates to a drop of almost 2 per cent in the balance of an average super fund.
“We also must remember the collapse in mining share investment is having a domino effect right through the economy. This great big new tax is creating a lot of uncertainty which explains why other sectors are also being hit. That will drive down super returns even further,” he said.
“The mining tax is now hitting the Australian dollar, with global investors recognising the sovereign risk caused by Rudd Labor and deciding to stay away from investing in Australia.
“Every worker and superannuant has a stake in Australia’s resources sector through superannuation. This government does not understand that superannuation performance depends on a strong resources sector.”
Since the new tax was leaked to the press, BHP has dropped by 19.62 per cent, Rio Tinto 16.36 per cent, Fortescue 35.05 per cent and Macarthur Coal 40.74 per cent, Mr Hartsuyker said.