Wesfarmers condemns RSPT
Wesfarmers Limited (WES) said, in reference to the Federal Government’s proposed Resource Super Profits Tax, that any threat to earnings is a threat to the level of dividend the company can pay. In a letter to shareholders today, the conglomerate’s chairman Bob Every said the proposed tax would have an impact on the company that goes beyond its coal mining operations.
“The flow-on effect on a broadly based conglomerate like ours might be seen as analogous to the potential impact of the tax, not just on the resources industry, but on the wider national economy,” Mr Every said.
“While we are not, in principle, opposed to the introduction of a well designed and structured resource tax as a replacement for multiple state based royalties, the proposed tax as announced is not what Australia needs."
Wesfarmers consists of eight operating divisions and has more than 200,000 employees.
Mr Every said Wesfarmer’s resources division paid an effective tax rate of 41% last year, or 51% if the Stanwell rebate is included.
He said as well as the tax rate itself, the company’s concerns were related to sovereign risk, the design of the tax and the consultation process.
Such concerns have been voiced by numerous mining companies since the tax was announced in early May.
”It is my strongly held view that the proposed new super profits tax would not only make Australia less competitive in the global resources industry, but also have significant flow-on effects for the broader economy and society,” Mr Every said.
In conclusion, Mr Every said Wesfarmers would continue to present its concerns to the Government.
As at 1413 AEST, Wesfarmers shares were up 5c to $28.87.
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