COMMERCIAL Mining companies seek tax deductions

Press, Volume CXVI, Issue 34132, 20 April 1976, Page 20

COMMERCIAL Mining companies seek tax deductions

Sew Zealand Press Association —CopprtJhr CANBERRA Several mining companies hate urged the Industries Assistance Commission to recommend reinstatement of shareholders’ tax deduction* for exploration investment.

One prospecting company. North Flinders Mines. Ltd. told the commission that the [company’s future depended on re-instatement of the [benefit, which was abolished in 1973. The Australian Mining Industry Council was the first to seek restoration of the shareholders’ deductions. The council argued against the recommendation in the commission’s draft report that the benefits should not be re-instated. It said that if 100 people each contributed SAustlOOO to an exploration syndicate, the whole sum would be deductible. Yet. if they* spent the

same amount on exploration, by forming a company, and the exploration failed, there would be no deduction available. The presiding commissioner (Mr C. W. Conron), and an associate commissioner (Dr R. G. Mauldon), both recommended that the benefit not be re-instated, in their contributions to the draft report. However, the second associate commissioner (Mr D. F. Livingstone). recommended re-instatement of the benefit, with new safeguards, to prevent the abuses that have occurred in the past. The Western Mining Corporation. Ltd. the Australian Petroleum Exploration Association. B. H. South. Ltd. and C.S.R., Ltd. urged the commission to revise its majority view, and recommend re-instatment of shareholders’ benefits. However. like A.M.1.C.. they also urged that stringent new conditions be applied. Ito ensure that the benefit was not abused. Mr A. C. Copeman. representing Consolidated Gold Field. Ltd. told the commission that it should not simply assume that the mining industry would return to [its former good times, j He did not wish to be too [pessimistic, but he could see ino reason why it should be (assumed that the industry [would return to the sort of (cyclical growth pattern that it had known.

The commisison was urged to review its recommendations on depreciation A majority of the com-

mission has recommended that depreciation be allowed over a maximum of 25 years, or the life of the mine, whichever is less. Most companies argued for outright deductibility of capital expenditure, or s much shorter depreciation period Several companies argued that tax concessions were preferable to subsidies, saying that finance was easier to arrange on the basis af tax concessions, rather than subsidies, which they thought were more liable to be changed.