AUSTRALIAN Treasurer Wayne Swan vowed yesterday to stand firm on a planned new tax on mining profits, to be set at 40 percent, despite widespread criticism from the country's booming resources sector.

Swan promised "generous transitional provisions for existing projects" but said the government would not bend on plans to legislate the tax in 2011, well after looming elections, and introduce it in July 2012.

The centre-left Labor government has been losing support in recent opinion polls and the tax is shaping as a major issue in the elections, expected in October.

"The miners know in their heart of hearts that they are going to have to pay a bit more because the royalties regime has not kept pace with the value of this resource, which is 100 percent owned by the Australian people," Swan told Australian Broadcasting Corp.

The new Resource Super Profits Tax was announced earlier this month when the government unveiled the findings of a major review of Australia's taxation system.

It will especially hit big miners like BHP Billiton, Rio Tinto and Xstrata. It will raise about A$12 billion (US$11 billion) in its first two years.

"You see what we are doing is removing an existing tax, effectively a royalty, and replacing it with a new one which is a better tax, one that will grow the industry in the long run," Swan said. "But some very profitable ventures will pay more."