Presentation on A Federal Mining Tax
Written by ACM   
Thursday, 17 March 2011

This is an  ACM presentation on the two proposals since 2010 for a Federal  mining tax.

Until recently the taxation of minerals and petroleum found within the territory of a State has been a matter for the State.

Land grants within the State normally reserved minerals to the Crown. But this is to the Crown in the right of the State, not the Commonwealth.

In 2010 the Rudd government proposed a 40% super profits tax on mines and petroleum found within the territory of the States. The miners said this would lead to a total effective tax rate of 55% which would make Australia uncompetitive.

When the Rudd government fell, the new Prime Minister Julia Gillard and Treasurer Swan negotiated an agreement with the three largest foreign miners for a substitute tax, the MRRT.

This will lead to a lower effective tax rate for the three foreign miners than that payable by the others including the Australian miners.

In addition the offshore PRRT will be extended to petroleum resources found within the territory of the States.

Both taxes raise important constitutional and federalism issues which are discussed in this presentation .

This part, Part I, serves as an introduction.  Parts II and III  are below.