Australia's mining tax falls far short of forecast
Australia’s minerals resource rent tax (MRRT) raised $122 million in its first six months of operations, the nation’s Treasurer reported. This is well short of the $2 billion that was forecast in the mid -year economic statement.
The failing of the tax will force the government either to borrow or to drop programs to fund key election promises, The Australian reported.
The government directly linked $1billion in superannuation tax concessions for low-income earners to revenue from the MRRT this financial year under the "spreading the benefits of the boom package." It now faces a revenue shortfall unless there is a large turnaround in mining profits in the next six months.
Opposition Treasury spokesman Joe Hockey called on Deputy Prime Minister Wayne Swan to resign over the failure of the MRRT to meet forecasts. However, the government leapt on a mistake by Hockey when he said the Coalition planned to abolish the compulsory superannuation increase from 9 to 12 percent when it scrapped the mining tax.
Hockey was later forced to clarify that the increase to 12 percent would stay.
Hockey said the introduction of the MRRT had damaged business certainty but failed to raise anything approaching the government's original forecasts.
"The Australian Taxation Office has now spent $50 million preparing for a tax that has raised $126 million and has caused untold harm to Australian miners and investment confidence in Australia," he said.
The Greens and independent MP Rob Oakeshott seized on the $126 million figure to call for changes to the tax. Greens deputy leader Adam Bandt will move a motion in parliament calling for the ditching of a provision in the tax that allows increases in state royalties to be deducted from MRRT payments. He said this could net the budget an extra $2.2bn in revenue.
Swan said it was clear revenues from resource rent taxes had taken a "massive hit from the impact of continued global instability, commodity price volatility and a high dollar."
As one of the few companies that would be paying the tax, BHP Billiton would not comment on the tax implications of the Treasurer's revelation. But it said it supported transparent reporting.
BHP would also not comment on reasons why the tax was raising much less than the government had expected. But it noted that, as it was a profits-based tax, the level of company liability for it would vary each year.
BHP has not disclosed its tax liability and is unlikely to do as the figures could be extrapolated to give an insight to profit results ahead of them being reported.
Rio Tinto would not comment on whether or not it had paid the mining tax.
Prime Minister Julia Gillard said the low mining tax levels paid proved that the opposition's claims that the tax would destroy the mining industry were irresponsible and wrong.