The Australian Competition and Consumer Commission has released a report predicting the country will see the new mining levy start to kick in this week.
The new tax, introduced in January, is designed to stop Australians investing in the stock market in the same way as foreign investors do, effectively taking out a loss and reinvesting it into the Australian economy.
It has been estimated the levy will be worth $12 billion to the economy by 2026.
But the report also said the impact will be even greater if it is imposed early, with the Government having to fund the new levy through the end of the financial year.
The report also warned the introduction of the levy would have a “material impact” on the global economy.
“The introduction of a new mining-related tax, if implemented early, could have a material impact on the worldwide economic activity, economic activity in the broader economy and the employment of workers,” it said.
The CSCE said the introduction “would have a significant impact on Australia’s economic activity” and said it could have an “immediate impact on GDP growth” of between 0.4 per cent and 1.5 per cent a year.
“As a result of the introduction, the impact on Australian economic activity will be greater than the expected impact of other tax measures,” the report said.
“For example, the introduction could have significant effects on the economic activity of overseas investors who will be expected to invest less.”
But the CSCE cautioned the impact of the tax was not entirely clear.
“It is not clear whether the impact would be as large as anticipated or less,” it wrote.
“Similarly, it is not known whether the introduction will cause an increase in the number of Australians employed in mining or whether the effect will be less.”‘
We don’t have a choice’Prime Minister Malcolm Turnbull and Treasurer Scott Morrison say the introduction was designed to address the concerns of businesses, but they are also pushing for the Government to “think beyond” its initial position.
“We are not at the point where we have a good idea what the impact is going to be,” Mr Turnbull said.
Mr Morrison said the Government had a “very clear plan” on how to introduce the new tax.
“What we are going to do is get the legislation through parliament, we are prepared to put forward a detailed economic plan and we will deliver it,” he said.
He said it was important to “talk to the business community and talk to people in the mining industry about what the consequences are of this, how much damage it is going the wrong way and what the options are.”
“I think the Government is making some very difficult decisions, but it’s important to think through all of that,” he added.