Media Release

Failed mining tax should be scrapped not expanded

Labor's failed mining tax should be scrapped not expanded.

The Minerals Resource Rent Tax is a complex, inefficient and distorting tax, which is costly to administer for government and costly to comply with for business.

The last thing we need is for a bad, value destroying tax to be expanded to other parts of the mining industry, which are already confronting significant challenges without it.

The MRRT is bad for investment in one of our most important industries, arguably at the worst possible time.

As such it is bad for our economy and, as is now obvious to most, bad for our budget too.

Instead of the $4 billion in net revenue the Treasurer Wayne Swan originally predicted the MRRT would raise this year it has raised just $88 million net so far.

Incredibly, our incompetent Treasurer has already spent all the money he thought it would raise and more.

There is only one more quarterly instalment to be added to that MRRT revenue figure for this financial year.

That's why it is highly questionable whether the MRRT will raise even the much reduced $800 million revised revenue estimate for this financial year.

Given that the Tax Office alone has already spent about $53 million administering the MRRT so far it is clear that the Gillard/Swan MRRT is a massive failure on every front.

While it hasn't raised any meaningful revenue, it is tying business and government up in massive inefficient, costly and unnecessary red tape.

There never was a need for a national mining tax to ensure the community receives an appropriate return from the extraction of its natural resources.

Across Australia the mining industry is already paying more than $20 billion in federal taxes and state royalties.

When profits are higher, miners will pay more company tax on profits and when commodity prices and production volumes increase they will pay more state royalties.

The system we had was simple and ensured an appropriate return for the community.

Labor found a resource taxation system that worked and made a complete mess of it.