Economy

Fortescue launches High Court battle over mining tax: Midday roundup

Engel Schmidl /

Mining giant Fortescue has said in a statement to the ASX it will launch a fresh challenge in the High Court over the Federal Government’s mining tax.

”We believe we have a good case for challenging the Minerals Resources Rent Tax on constitutional grounds and we look forward to the resolution of these important issues in the High Court,” chief executive Nev Power said in a statement.

The challenge is based on grounds that the tax discriminates between states, breaching section 51 of the Constitution.

This comes after months of debate between the government and major mining companies – a debate which helped dethrone former prime minister Kevin Rudd.

A spokesperson for acting Prime Minister and Treasurer Wayne Swan said this wasn’t a shock.

”Mr Forrest has made it clear that he is staunchly opposed to the government spreading the benefits of the mining boom to millions of households and small businesses who aren’t in the fast lane,” he said, according to Fairfax.

“The Gillard government believes Australia’s non-renewable natural resources belong to all Australians, not just to a handful of mining billionaires, and is determined to deliver the MRRT to ensure the Australian community shares in the benefits and opportunities of the mining boom.”

The tax is due to begin from July 1.

Qantas won’t go under, Hockey claims

Qantas is not in danger of going under, according to shadow treasurer Joe Hockey, in comments made following a warning the company can’t compete with its middle-eastern counterparts.

Qantas has reportedly warned that it cannot compete against Etihad Airways if it doubles its stake in Virgin – it’s reported to be seeking a 10% holding.

“I don’t think it’s going to go under if Etihad increases their stakeholding,” Hockey told the Seven Network.

“Already Air New Zealand and Richard Branson have much larger stakes as foreign investors in Virgin than Etihad.”

However, Hockey did say the country has hard decisions to make about Qantas’ future.

“We have to make a decision about whether Qantas does become a major international airline with a majority ownership overseas,” Hockey said.

Myer shares continue to sink

Shares in Myer have continued to fall, with the company’s price falling 0.59% this morning to $1.68.

Chief executive Bernie Brookes said yesterday the share price has been affected by general market turmoil.

Myer has been attempting to restructure its business, launching a multi-million dollar plan to transform itself into an “omnichannel” retailer. Competitor David Jones is doing the same.

Shares fall after mining tax challenge announced

Shares have fallen this morning after the Federal Government was slammed with a challenge to its mining tax by giant Fortescue, along with a negative lead from the United States.

The benchmark S&P/ASX200 index was down 42.4 points or 1% to 4045.2 at 12.00 AEST, while the dollar rose to just above parity.

In the United States overnight, the Dow Jones Industrial Average fell 250 points or 2% to 12,573.6.

The market has also been affected by news from Europe, where Moody’s has slashed the ratings of 15 global banks due to their exposure to the European debt crisis.

 

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