Australia's Mining Tax War Gets Dirty

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"The war over the resources super tax has descended into a bitter standoff"

The war over the resources super tax has descended into a bitter standoff, with Wayne Swan accusing mining giants of lying about their tax burden.

In an increasingly bitter clash that will taint the upcoming federal election, the Opposition claimed the Treasurer was engaging in the politics of panic and desperation.

Opposition Finance spokesman Andrew Robb said Swan had relied on research from a US student, who belongs to an "I love taxes" website, to claim big miners paid just 13%17% tax.

But in a taste of the election fight, the Government hit back.

It accused the Coalition of doing the dirty work of the Minerals Council of Australia to secure "grubby" donations.

Swan said there was an "unprecedented, hysterical scare campaign" under way and accused mining companies of reaping "generous deductions" and "not telling the truth."

Relations between the government and the mining industry are now at an all-time low.

The uncertainty over the future of the 40% super profits tax has sent jitters through the Queensland economy and Premier Anna Bligh is agitating for changes.

The Queensland Resources Council is warning about $130 billion worth of projects in the state are in limbo.

The Minerals Council is incensed at Swan's tax rate claims, saying miners pay an average corporate tax rate of 27.81% and when royalties, which will be all but replaced under a tax on profits, were added in, the effective tax rate was 41.3%.

The research paper at the center of the initial taxation claims was authored by University of North Carolina graduate student Kevin Markle.

"I believe we are clear about what we do in the study and the limitations our findings have for specific public policy issues," Markle said. "It is not for us to dictate how people use the results that we present. . ."

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