Spinoff for NZ mining seen as limited

Mining in New Zealand could get some spinoff from Australian Government proposals to hit resource companies with a new 40 per cent tax but the effect could be limited, say industry insiders.

Heritage Gold executive director Peter Atkinson said the move could lead to a cut in investment across the Tasman.

"The real question is how do we make New Zealand more attractive. It's nice of Australia to give us a hand by imposing a super tax but what we need is the right environment in New Zealand," he said.

"You could see it as a significant deterrent but I'm not sure that's sufficient to direct people away from Australia."

The head of research at McDouall Stuart, John Kidd, said the Australian tax proposals had the potential to make New Zealand more attractive although the resources sector here was in its infancy.

Companies such as Rio Tinto and Fortescue - which both already hold interests in early-stage iron sand prospects along and off the west coast of the North Island - would find perceptibly friendlier long-term fiscal terms more attractive.

Industry umbrella group Straterra said the flow-through share scheme also announced in Australia would help to balance the impact of the super profit tax.

The scheme would allow companies which cannot deduct losses to pass them through to shareholders, who are then able to use the scheme to offset their own tax liabilities.

Straterra wants to see a similar regime introduced here.