The proposed tax continues to draw vocal criticism from a number
of quarters. Smaller mining companies have criticised the
government for not consulting them on the design of the revised tax
and instead negotiating only with the country's three biggest
miners, BHP-Billiton, Rio Tinto and Xstrata.
At a recent summit held by the Australian Agricultural and
Resource Economics Society, prominent economists pointed out the
flaws in the MRRT, describing it as "a patch-up" and
"merely an exercise in buying time" and stating that it
would undermine coal and iron ore exploration, distort investment
and promote inefficiency.
The Business Council of Australia has also spoken out against
the MRRT, arguing that no firm decision should be made until after
the tax summit in June next year. Significantly, mining industry
analysts have also cast doubt on the ability of the tax to generate
the government's projected $10.5 billion over its first two
years, stating that the sum to be raised in tax revenue is more
likely to be in the vicinity of $2-3 billion.
While Treasurer Wayne Swan continues to insist that he expects
the MRRT to be in draft legislation form by the time of the tax
summit, some within the mining industry point to independent Tony
Windsor as the possible weak link in the federal government's
plans to implement the tax.
Any decision to delay the introduction of the MRRT until after
next year's tax summit would give the mining industry a
significant reprieve, as the Treasurer is well aware. It is also
undeniable that it would give the government some respite from the
attacks it has endured from mining industry lobby groups in recent
On one hand, the government faces the prospect of a Senate
controlled by the Greens, who are likely to push for the MRRT to be
broadened to include other minerals, particularly uranium. On the
other, any expansion of the tax could once again crank up the
well-resourced anti-Labor publicity machine of the mining
On any analysis, both the minority federal government and its
proposed minerals resource rent tax seem to be facing an uncertain
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It is a common misconception that the grant of mining tenure, whether it be an Exploration Permit, Mineral Development Licence or Mining Lease, will entitle the holder to access all land within it in order to explore or mine.
This briefing note sets out a likely structure for the proposed privatisation of the networks and identifies key issues.
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