SYDNEY, Nov 15, 2010 (AFP) - Australia's government will fight to introduce a proposed tax on the lucrative mining of coal and iron ore, Treasurer Wayne Swan said Monday, despite international criticism on some aspects of the levy.

In a report released Sunday, the Organisation for Economic Cooperation and Development (OECD) said Australia was right to propose the tax but urged the government to beef up the proposed level of 30 percent on profits.

But Swan ruled out making further changes to the controversial tax, which has been watered down from 40 percent since it was announced in May, saying the centre-left Labor government had reached agreement with the mining industry.

"It's good for the country," Swan told ABC Radio. "And we will fight for this in the parliament because it's good for the economy."

Prime Minister Julia Gillard leads a minority government which requires the support of independents and a Greens MP to pass legislation in the lower house.

The OECD said Australia had rebounded powerfully from the global slump but urged the country to hike its mining profits tax and save the spoils, warning that reliance on the China-linked resources boom posed "important risks" to its growth and said the tax should apply more broadly.

The proposed tax was likely to distort investment incentives because it only applied to iron ore and coal, with a large deterrent effect for marginal projects, the OECD said.

"The proposed tax is set at a relatively low level and... the efficiency gains of the new tax will be mitigated by its coverage of only larger firms and certain sectors," it said.

The OECD flagged GDP growth of 3.3 percent for Australia in 2010, 3.6 percent for 2011 and 4.0 percent for 2012 - roughly in line with government forecasts.