THE Mineral Resources Rent Tax was the federal government’s compromise solution to the need to extract more tax revenues from a profitable mining industry at the height of a global boom.
Other mining nations have followed Australia’s lead, but the MRRT as finally adopted is now widely accepted as less-than-ideal legislation unlikely to raise anything like the early treasury estimate of $13.4billion over four years.
Complicating matters, the MRRT compensates mining companies for any increase in state and territory royalties.
To offset the impact of Labor’s carbon tax, the O’Farrell government lifted coal royalties to raise an extra $900million in three years.
The Western Australian government recently lifted iron ore royalties and new Queensland premier Campbell Newman is looking to follow suit with coal.
Treasurer Wayne Swan is threatening the states with retaliatory cuts in infrastructure funding, but for the time being at least, the three Liberal premiers look prepared to call his bluff.
While both levels of government are obviously entitled to protect their positions, the big losers from such stand-offs are likely to be mining regions – such as the Hunter – which were promised a flow of state and federal money from various royalty-linked spending programs.
Much of the early income from the MRRT has been earmarked to pay for tax cuts and superannuation increases. With further spending cuts needed to achieve the all-important budget surplus, the outlook for regional spending initiatives looks uncertain at best.
Then there’s yesterday’s decision by BHP Billiton to scrap its $20billion expansion of its Olympic Dam project, which is further evidence the boom has passed its peak. Minerals prices may still be well above historical levels, but so are costs, and BHP is unlikely to be the only mining company reporting a big fall in profits this year.
In such a climate, Canberra and the states must put an end to the bickering, and ensure that regional Australia gets a fair share of mining revenues. Otherwise, we will look back on this time and ask how the benefits of a once-in-a-lifetime boom could have been so unwisely squandered.
Phoning up debts
THEY’RE a wonderful invention for all sorts of reasons but mobile phones can be extremely expensive if not managed properly. Lifeline counsellors say growing numbers of Hunter families are seeking help in dealing with extremely large mobile bills, many of them racked up by children apparently unaware of the costs they were incurring.
As Lifeline says, those on limited budgets are probably better off with pre-paid phones loaded with set amounts of credit.
The so-called ‘‘technology gap’’ means that even young children will sometimes be more familiar with the intricacies of mobile phones than their parents.
But the potential costs of a runaway mobile means parents should keep a firm eye on family phone habits if they want to avoid expensive ‘‘bill shock’’.