Economy

Twiggy Forrest loses case against the mining tax, construction contraction rate slows, new dwelling commitments rising: Midday Roundup

Yolanda Redrup /

Andrew “Twiggy” Forrest has lost a High Court case challenging the constitutionality of the Labor government’s controversial mining tax.

The mineral resources rent tax currently imposes a 22.5% tax on profits over $75 million derived from the extraction of iron ore, coal and coal-seam gas.

Forrest’s company, Fortescue Metals Group, argued the tax breached a number of constitutional requirements, including not being levied uniformly across the states.

The challenge to the tax was dismissed unanimously, with the court ruling it “did not discriminate between states and that the acts did not give preference to one state over another”.

The mining tax, which was introduced in July 2012, produced far less revenue than expected for the federal government, raking in just $200 million in its first year, rather than the $2 billion it was anticipated to generate.

Should the Coalition be elected on September 7, Tony Abbott has vowed to remove the tax.

Construction contraction rate slows

The construction sector has started edging closer toward growth in July, with new figures showing its rate of contraction slowing, despite its 38th month of decline.

The Australian Industry Group/Housing Industry Association Performance of Construction Index shows construction up 4.6 points overall to 44.1 in July. Readings below 50 indicate contraction.

Decline slowed as the fall in new orders was the slowest in almost 2.5 years. Activity and employment in the sector also improved.

New dwelling commitments rising

The number of new owner-occupied housing finance commitments rose 1.9% in June, in trend terms.

New figures from the Australian Bureau of Statistics indicates the number of financial commitments for the purchase of established dwellings increased 2.1% in June, while the commitments for the purchase of new dwellings increased 1.8%, and commitments for construction on new dwellings rose 0.9%, in trend terms.

The seasonally adjusted figured for total new housing commitments was up 1.2%.

Shares follow Wall St lower

Aussie shares have plummeted this morning, following European and United States markets lower.

The S&P/ASX200 benchmark was down 55.3 points to 5050.3 just before midday.

All major industries were down, with the mining sector and financial companies suffering the heaviest blows.

Overnight the Dow Jones lost 93.39 points, closing 0.60% lower at 15,518.74.

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