Greens Not To Force Australian Mining Tax Changes

by Mary Swire, Tax-News.com, Hong Kong

21 September 2010

The Australian Greens leader, Bob Brown, has said during a television interview that his party would not try to force the increase to the rate of the proposed mineral resources rent tax (MRRT) that they had threatened during the election campaign.

The less onerous 30% MRRT replaced a 40% resources super profits tax in July this year after the government negotiated changes in the tax with the country’s largest mining companies. In the non-oil sector, the MRRT will apply only to iron ore and coal, Australia’s biggest and most profitable commodities, and be levied from July 1, 2012.

During the election campaign, the Greens had said that, if the party held the balance of power after the election, they would try to reverse the reduced rate of the MRRT in order to increase revenue from the mining sector and reinstate certain tax reductions for small businesses. Furthermore, the party had indicated that it would also look to amend the new tax to include uranium mining.

However, although the new Labor government will indeed depend on the Greens for a slim majority in the Senate from next year, Bob Brown, in an interview on Channel Ten’s ‘Meet the Press’, disclosed that, although his party would try to negotiate with the government to obtain a rise in revenue from the MRRT, they would vote for whatever was finally decided upon.

He expected that the MRRT would be finally fixed at the currently-proposed rate of 30% and apply solely to iron ore and coal. His expressed opinion was that the government’s proposal to take some tax revenue through the MRRT was preferable to the alternative of no additional mining taxation proposed by Coalition opposition.

The government may therefore be assured of the Greens’ support for the MRRT in the Senate, but will still need to convince the independent members on whom its majority depends in the House of Representatives.

The consultations now in hand through the government’s mining tax policy transition group are certainly important in that respect. The government is reported to being looking for all the details of the MRRT to be in place by the end of this year.

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