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AUSTRALIA


range of issues, examined the expenditure of HSU funds for the purpose of assisting Mr Thomson’s election to Parliament for the seat of Dobell. The FWA report found almost $270 000 worth of expenditure that allegedly could be attributed to this purpose. In rejecting this finding, Mr Thomson drew attention to analysis of the FWA report by the Australia Electoral Commission (AEC). Mr Thomson stated that “quite clearly the AEC report that was


issues surrounding Mr Thomson.


On 28 May the Senate Employment and Workplace


Relations Committee scrutinised representatives


THIRD READING: AUSTRALIA


Minerals Resource Rent Tax Act 2012 Australia is experiencing an unprecedented mining boom with high levels of investment and profit. The Minerals Resource Rent Tax seeks to tax mining profits more effectively and fairer. Currently, state and territory governments generally tax non-renewable resources by applying a royalty on production. Royalties are generally applied on the basis of volume or value and do not take into account how profitable a mining operation is. The Assistant Treasurer, Hon. Bill Shorten, MP, commented that “royalties often take a flat amount of revenues or production regardless of profitability”. The Minister argued that taxing profits was more effective noting that “taxes on profit return more to the nation when times are good, but they also relieve the tax burden on the industry when times are bad”. The expected revenue from the Minerals


Mr Craig Thomson, MP


released last week blows a massive credibility hole in everything that Fair Work Australia did”. Mr Thomson’s statement


continued for almost an hour in which he discussed his achievements in his seat of Dobell, and sought to address some of the more serious findings in the FWA report. The Opposition used the statement to assist its scrutiny of relevant government agencies during Senate estimate.


Senate budget estimates Senate budget estimates were held in the weeks commencing 21 May and 28 May 2012. Estimates hearings are considered one of the most effective mechanisms for scrutinising the performance of executive government. Various agencies were scrutinized on


Resource Rent Tax (MRRT) will allow the government to distribute the mining boom to other parts of the economy. The revenue will provide for a small business asset write off and deduction for motor vehicles. In addition, the mining tax will help fund, over time, an increase in the Superannuation Guarantee (SG) levy, from the current 9 per cent, to 12 per cent. The SG is paid by employers for all eligible employees who are paid more than $450 in a calendar month. The minimum level of super support for eligible


employees is currently 9 per cent of an employee's ordinary time earnings. In addition to these measures, Mr Shorten advised that the mining tax will “fund billions of dollars of new roads, bridges and other critical infrastructure, such as the Gateway project in Western Australia. Much of this infrastructure will benefit where the resources come from and where the workers and their families live, such as the great coalmining regions of New South Wales and Queensland”. The opposition is fiercely opposed to the MRRT.


During debate in the Senate, the Shadow Assistant Treasurer and Shadow Minister for Financial Services and Superannuation, Senator Mathias Cormann commented that “we were promised root- and-branch tax reform which would make our tax system simpler and fairer—what the government has delivered is manifestly more complex and less fair”.


Senator Cormann raised concerns about the mining tax revenue estimates and how the new tax would interact with the state royalty arrangements. Senator Cormann stated that “it is obvious that the spending commitments that the Labor Party have attached to the mining tax are far greater than even what the government suggest would be raised in revenue through the mining tax”. The legislative package was referred to both the


House and Senate Economics Committees for separate inquiries and reports. The reports of both committees contained dissenting reports by opposition members. The House Economics committee stated that “the mining boom is generating massive profits but not all Australians are benefitting. The government’s proposal to tax mineral resources more efficiently and link the increased revenue to specific measures which support small businesses and workers is an effective solution to sharing Australia’s mineral wealth across Australia and into the future”. In contrast, Coalition Senators of the Senate


Economics committee stated that “the Mining Tax Deal entered into by the Gillard government gives an unfair competitive advantage to the three largest miners who were given exclusive access to secret negotiations on the new tax design, makes federal Budget outcomes hostage to decisions about royalties by state and territory governments and raises serious and unresolved constitutional issues”. The minority report of the Australia Greens Senators commented that “the benefits of the mining boom have been the subject of exaggerated claims and the mining industry pays less than its fair share of tax”. The Australian Greens noted that “the mining boom has led to an appreciation of the Australian dollar, higher interest rates and shortages of labour in certain regions or with certain skills. These impacts are in turn leading to lower profits


and lower returns to shareholders in other industries such as manufacturing and tourism. The Australian Greens argued that ‘a better designed mining tax could raise a lot more revenue than the Minerals Resource Rent Tax (MRRT) – in the order of an additional $100 billion over the next decade”. On 19 March the legislative package passed the Senate 38 votes to 32.


The Parliamentarian | 2012: Issue Two | 141


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