DEPENDING on the day, Tony Abbott’s Coalition asserts either that the government’s minerals resource rent tax (MRRT) will ‘‘penalise success’’ or fail to earn enough money to be worth the trouble.
The fact that both assessments can’t simultaneously be true doesn’t appear to worry the opposition.
Perhaps that’s because, either way, it will be able to keep using the tax as a weapon to belt the government, just as it has been doing ever since the mining industry declared war on Labor over Kevin Rudd’s original ‘‘super profits tax’’.
Some voters, however, might want to really know which alternative is likely to be true. Will the tax send the miners scurrying for safe havens overseas and discourage them from making new investments in Australian resources?
Or will the tax prove a disappointing source of funds, forcing the government to revise its budgets and break spending promises?
At this stage it appears the latter may be more likely.
It is clear, at least, that mining companies are still investing heavily in resource projects – a fact that suggests they don’t feel their viability to be seriously threatened by the prospect of the new tax.
On the contrary, two reports issued this week appear to support the view that the biggest mining companies will pay little, if anything, under the MRRT in its first few years of existence.
The government has budgeted on receipts of about $6.5billion in the next two years, but a study commissioned by the Minerals Council of Australia warns the government against taking too much stock of its projections.
A separate report by Swiss finance group UBS has forecast receipts of just $3.2billion in the first two years, suggesting that volatile resource prices and exchanges rates make the tax too unreliable a foundation on which to base firm budget promises.
To make matters more confusing, mining boss Andrew Forrest is challenging the validity of the MRRT, having alleged bitterly for many months that the government had struck a cosy deal with multinational giants BHP Billiton, Rio Tinto and Xstrata that unfairly penalised smaller miners.
Taken all in all, it’s hard to escape the conclusion that sticking with the original plan to tax ‘‘super profits’’ when and if such windfalls arose, might have been a smarter strategy after all.
Save the SIDS house
AS Red Nose Day marks 25 years of raising community awareness of sudden infant death syndrome (SIDS) it’s a matter for sadness that Newcastle’s SIDS and Kids drop-in centre may be facing closure.
Losing a child to SIDS can bring a lifelong legacy of pain and guilt, and the drop-in centre has been a resource of great value to many Hunter families. Its closure would be keenly felt.
Now that SIDS and Kids patrons Mark and Jenny Richards have raised the issue, Hunter businesses should check their budgets for spare funds to keep the centre open and operating.