Labor accused to trying to back out of tax deal

12:33 pm on 8 September 2010

The new Labor Government is being accused of trying to back out of a deal to hold a comprehensive tax summit, one day after clinging to power with the support of two key independent MPs.

Under its deal with independent MP Tony Windsor, Labor has agreed to hold a tax summit by 2011 to discuss all options put forward by the Henry Tax Review earlier this year.

Mr Windsor says he wants the 30% mining tax to be part of the talks, but Labor says that will not happen.

Mr Windsor said on Wednesday that he had been under the impression that the mining tax would be up for discussion.

He has indicated he is not happy about its exclusion and intends to speak with Federal Treasurer Wayne Swan.

Opposition frontbencher Christopher Pyne has accused the Government of already trying to back out of its deal with Mr Windsor.

"Labor is already sliding away from the deal they made with the country independents but because they are supporting the wrong party there's very little they can do about," he told ABC Radio.

"They are stuck supporting Labor when their seats, their history, their instincts, should have been telling them to support the Coalition.

"These two will have all the joy of sitting on a prickly pear for the next few years while they support the Labor Party."

Mr Swan says the Government is already committed to the tax and if independents want to discuss elements of the legislation they can.

30% tax

Former prime minister Kevin Rudd the Government angered the mining industry by pledging to introduce a 40% tax on resources in order to fund a superannuation boost and a cut in the company tax rate.

After Julia Gillard replaced Mr Rudd as Prime Minister, she lowered the rate of the tax to 30% and offered other concessions to the industry.

The Greens, who now hold the balance of power in the Senate, support lifting the tax to its original level.