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Mining tax review on cards after MP pressure
Date February 12, 2013
Senior political correspondent
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Mining tax volatile or just plain bad?
Why aren’t Australian tax payers getting more from their mining tax? Kelly O’Dwyer MP and Sen. Louise Pratt in the studio.
THE federal government could change its underperforming Minerals Resource Rent Tax after pressure by the Opposition, the Greens, independents, and even from within its own party room.
The Prime Minister, Julia Gillard, said the issue of refunding royalties was still on the table with the states’ premiers, while the Treasurer, Wayne Swan, said the tax itself would be reviewed.
”We will look at the performance of this tax, in light of prices, in the normal way, by our Treasury and, of course, by our tax department,” Mr Swan told Parliament.
The comments follow the government’s reluctant admission that the MRRT, which is a watered-down version of Kevin Rudd’s stymied super-profits tax, had generated only a fraction of the projected revenue.
On Friday, Mr Swan said the tax had raised only $126 million in the first half of 2012-13, well short of $2 billion predicted for the full financial year.
The admission has embarrassed the government, which had already allocated the anticipated funds to a series of programs aimed at shoring up its electoral base, including increasing the superannuation guarantee from 9 per cent to 12 per cent, and the abolition of tax on superannuation contributions for the low paid.
The government blames the tax shortfall on low iron-ore prices in 2012, plus the belligerence of state governments in increasing mining royalties that have to be refunded to miners under the terms of the MRRT.
The tax’s shortcomings dominated Parliament on Monday, frustrating Labor’s attempts to move to its preferred ground of industrial relations with changes to the Fair Work Act to improve protection for vulnerable workers.
A raft of government questions centred on extending the existing right to ask employers for flexibility on working hours to women subject to domestic violence, and parents returning from parental leave.
Labor wants to draw the Coalition into a debate on industrial relations in the hope of reviving memories of the unpopular Work Choices laws introduced by the Coalition under John Howard’s leadership.
However, the Opposition Leader, Tony Abbott, has stuck with the issues of the economy and the mining tax.
He asked if Ms Gillard retained her confidence in Mr Swan given ”the Treasurer’s failure to deliver the promised surplus this financial year; his failure to collect more than 10 per cent of the promised $9 billion in mining tax revenue, and his failure to deliver on his promise to create a least 500,000 new jobs in two years”.
The Prime Minister was asked if she would rule out design changes to the mining tax.
In her reply, Ms Gillard said state governments had been ”reckless” in increasing mining royalties, and indicated that the GST Distribution Review had advised that the situation was ”unsustainable and undesirable”.
”Interestingly enough, the Opposition that has always criticised an efficient profits-based tax in minerals has gone tick, tick, tick to Liberal royalty increases around the country,” she said.
In another development, the shadow Treasurer, Joe Hockey, has dashed hopes of releasing the Coalition’s costed policies soon, after advice from the Parliamentary Budget Office that the most reliable budget baseline will not be known until the pre-election economic and fiscal outlook report is finalised.
That brought a withering response from Mr Swan. ”This is a deeply deceptive ruse from the Coalition to hide the impact of their policy proposals from the Australian people,” he said.
”The idea that the Coalition can refuse to release what any of their policies cost until deep into the campaign is unprecedented.”
Read more: http://www.smh.com.au/opinion/political-news/mining-tax-review-on-cards-after-mp-pressure-20130211-2e8wk.html#ixzz2KddM0ZTy