Give Tax Break To Miners, Says Study

Sydney Morning Herald

Tuesday December 9, 2008

Joel Gibson Indigenous Affairs Reporter

EXTENSIVE tax breaks would be given to mining and resources companies that do the right thing by native title claimants under proposed improvements to the native title system.

Tax breaks proposed in a new report would be granted to companies that invest in indigenous organisations and build infrastructure in remote areas, and to venture capitalists who invest in indigenous enterprises.

These would be treated like regular business expenses, such as capital works or research and development, as resources giants were being forced to take on some of the responsibilities of governments in remote Australia, where services are rare.

The report also recommends favourable tax treatment for trusts that have an intergenerational benefit for indigenous communities, to encourage long-term investments rather than just short-term cash payments for access to land. They should be taxed like superannuation or private foundations, it said.

Fifteen years of negotiations under the Native Title Act had produced a handful of model agreements because native title groups were inadequately represented and companies and governments had taken advantage of that.

New entrants into the industry were the worst offenders, the report said. "While hundreds of agreements exist between traditional owners and industry, there are only around one dozen agreements that provide substantial benefits to Aboriginal people and Torres Strait Islanders and exhibit principles embodying best practice in agreement making.

"Traditional owners' interests are often compromised in negotiations. Commonly the traditional owners' interests are not adequately represented. In some cases the mining company or proponent is left with no practical choice other than to meet the costs of both parties in the negotiations."

The Federal Government appointed a native title working group, made up of experts from the indigenous community, mining industry, academia and the legal profession, to review the system in June amid fears that the mining boom could pass some indigenous communities by, or damage traditional owner groups with large cash payments and no long-term planning.

It recommended more funding for native title representatives in negotiations, which were sometimes being paid by mining companies, and for developing a pool of work-ready indigenous people for the mining and resources industries.

Rio Tinto was singled out for its role in making agreements with short-term and long-term benefits, particularly at the Argyle diamond mine in Western Australia's Kimberley region and Cape York. The Argyle agreement provided royalties estimated at more than $50 million to be paid into trust funds for community development and set targets of 50 per cent indigenous employment at the world's largest diamond mine.

More than 60 per cent of mineral operations in Australia are next to indigenous communities, and about 340 new resource development projects are proposed in coming years.

The Government published a discussion paper in response to the working group's report yesterday and is seeking public comment by February.

The Attorney-General, Robert McClelland, said the native title system had been hampered for too long by an overly legalistic approach. "We need a more flexible system, including improving native title agreements to ensure potential benefits flow through to present and future generations of indigenous Australians."

© 2008 Sydney Morning Herald

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