Sydney - AFP
Australia\'s controversial tax on the country\'s mining industry, seen by Canberra as a critical economic reform, cleared a key hurdle Wednesday when it passed through the lower house of parliament. Prime Minister Julia Gillard\'s fragile minority government gained support from the Greens to enable the Minerals Resource Rent Tax Bill 2011 to scrape through the House of Representatives after a marathon session in the early hours. It will now move to the upper house Senate before it officially becomes law. \"The vast majority of those who will be paying the MRRT understand the importance of this economic reform and support it,\" said Gillard. \"We know Australia\'s resources boom won\'t last forever. The minerals can be dug up and sold only once. \"That\'s why the government is committed to ensuring the Australian community receives a fair return from the mining boom and that we lock in the gains for generations to come.\" The tax is due to start on July 1, 2012 and is expected to generate Aus$11.1 billion (US$10.84 billion) in its first three years, which the government will put towards funding infrastructure, pensions and tax cuts for small businesses. It will kick in when a company makes Aus$75 million per year in profit, a concession the Greens won to protect smaller miners. Initially it would have kicked in at Aus$50 million. The Labor government originally wanted a 40 percent tax on all extraordinary profits generated by resources firms as the nation enjoys unprecedented demand for its vast mineral deposits, mostly from rapidly industrializing Asia. But this was scrapped in favour of a 30 percent tax only on iron ore and coal super-profits after a furious and intense campaign from the powerful and wealthy mining industry. Treasurer Wayne Swan said the tax was a critical reform to ensure the mining windfall was shared around. \"This is ... a very significant reform that owes a great deal to the determination and guts of our prime minister, because this has been hard fought,\" he told journalists. Australia is the world\'s biggest exporter of the iron ore and coking coal used in steelmaking and the second-biggest exporter of thermal coal used in power stations. The conservative opposition has vowed to repeal the tax if it wins government with critics charging that it increased sovereign risk in Australia and will drive investment offshore.