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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’?


McLaren, J and Chabal, P, 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'?, Journal of the Australasian Tax Teachers Association, 6, (1) pp. 20-37. ISSN 1832-911X (2011) [Refereed Article]

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The Australian Government introduced a resource rent tax on offshore oil and gas deposits in 1987 and since then it has raised in excess of an additional $1 billion a year in revenue over and above the normal company tax on income. At the time it was being introduced a great deal of controversy followed the proposed introduction of the petroleum resource rent tax (PRRT). On 2 November 2011, the Australian government introduced the raft of bills into Parliament for the imposition of a Mineral Resource Rent Tax (MRRT) on profit generated from iron ore, coal and gas from coal seams from 1 July 2012. Onshore oil and gas deposits will now be subject to a rent tax under the new PRRT regime that was also introduced into Parliament on 2 November 2011. The proposed MRRT has been met with criticism from certain mining companies, the Opposition parliamentary parties and noted economists. However, Australia currently has a budget deficit and a MRRT is being viewed by the government as being a solution to repaying government debt and to redistribute 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 increase government 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 Australia for over 14 years? The paper will also contend that there are sound philosophical reasons for having this form of taxation and that as a result of the continued existence of a PRRT in Australia together with the fact that resource rent taxes have been adopted in many other countries, that the criticism of the new MRRT is unwarranted.

Item Details

Item Type:Refereed Article
Keywords:Petroleum Resource Rent tax and Mineral resource rent tax
Research Division:Law and Legal Studies
Research Group:Commercial law
Research Field:Taxation law
Objective Division:Law, Politics and Community Services
Objective Group:Community services
Objective Field:Ability and disability
UTAS Author:McLaren, J (Dr John McLaren)
ID Code:128604
Year Published:2011
Deposited By:TSBE
Deposited On:2018-10-02
Last Modified:2018-11-26
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