Given the fact that Australia has had a ‘Petroleum Resource Rent Tax’ since 1987, why should there be any opposition to a ‘Mineral Resource Rent Tax’?
Year: 2011
Type: article
Abstract: The Australian Government introduced a resource rent tax on offshore oil and gas deposits in 1987 and sincethen it has raised in excess of an additional $1 billion a year in revenue over and above the normal companytax on income. At the time it was being introduced a great deal of controversy followed the proposedintroduction of the petroleum resource rent tax (PRRT). On 2 November 2011, the Australian governmentintroduced the raft of bills into Parliament for the imposition of a Mineral Resource Rent Tax (MRRT) onprofit generated from iron ore, coal and gas from coal seams from 1 July 2012. Onshore oil and gas depositswill now be subject to a rent tax under the new PRRT regime that was also introduced into Parliament on 2November 2011. The proposed MRRT has been met with criticism from certain mining companies, theOpposition parliamentary parties and noted economists. However, Australia currently has a budget deficit anda MRRT is being viewed by the government as being a solution to repaying government debt and toredistribute the burden of tax by reducing the rate at which companies pay income tax. A Resource Rent Tax(RRT) has been used by a number of countries such as the United Kingdom and Norway to increasegovernment revenue from their 'North Sea' oil reserves. This paper will address the question raised above:namely, why is there opposition to a proposed MRRT given the continued existence of a PRRT in Australiafor over 14 years? The paper will also contend that there are sound philosophical reasons for having this formof taxation and that as a result of the continued existence of a PRRT in Australia together with the fact thatresource rent taxes have been adopted in many other countries, that the criticism of the new MRRT isunwarranted.
Authors: John McLaren, Pierre Chabal
Institutions: University of Wollongong, Université Le Havre Normandie
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W73657266