The Australian Senate have now passed a law of 30% tax on both coal mining and iron ore companies. According to a variety of sources the tax is due to raise over AUD$10bn over the next few years from three of the major mining companies. With the expansion of China, India, Russia and Brazil and their need for Australian natural resources this has had a direct impact on the strength of the Australian Dollar which last year hit a 26 year high against Sterling.
The new mining tax comes into place on 1st July and the idea is to share the revenue generated across the wide economy. Another proposal is to cut the company tax rate to 29% from 30%. The original idea was to charge 40% but this was challenged by the mining giants and therefore the compromise was reached.
With the Bank of England minutes due out tomorrow morning and GBPAUD currently trading 1.51 I think we could see 1.52 if the minutes show a 9-0 vote against further Quantitative Easing. For further information please contact me Tom Holian [email protected]