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Tensions on first day of government

Tensions have emerged on the first full day of Australia's new minority government's rule between the deputy PM and a kingmaker independent legislator over plans to make mining companies pay more tax.

The disagreement between deputy prime minister Wayne Swan and Tony Windsor underscores the fragility of the centre-left Labour Party administration that could be brought down by a single politician defecting.

As part of a deal to get Mr Windsor and fellow independent Rob Oakeshott to throw their support behind a Labour government on Tuesday, Mr Swan and Prime Minister Julia Gillard promised to hold a public summit of tax experts by June 30 next year to discuss options for tax reforms recommended last year in a Treasury department report.

But Mr Swan surprised Mr Windsor by saying that Labour's plan to impose a new 30% tax on iron ore and coal miners' profits, which are burgeoning with the voracious demand for raw materials from Chinese and Indian manufacturers, will not be submitted for review at the summit.

Mr Swan said some of the 10.5 billion Australian dollars (£6.2 billion) to be raised from the tax over two years was needed to pay for other sweeteners offered to Mr Windsor and Mr Oakeshott, including 10 billion Australian dollars for upgrading rural schools, hospitals and other infrastructure outside major cities.

"There are going to be vigorous debates and the mining tax is one where we do disagree," Mr Swan told reporters.

Mr Swan said he hoped to introduce the mining tax legislation in Parliament as soon as possible.

Mr Windsor said he understood that the mining tax plan would be scrutinised at the tax summit and would talk to Swan about having it included.

"I thought it was going to be included in any discussions in relation to taxation" and the Treasury report, Mr Windsor told Australian Broadcasting radio on Wednesday.

Labour was returned to govern for a second three-year term on Tuesday, after 17 days of intense negotiations since an election on August 21 failed to give any party a clear majority for the first time in 70 years.


From Belfast Telegraph