High Court Clears Henry Rent Tax
Letter to the Editor – AFR
Gavin R. Putland, Melbourne
The High Court of Australia’s decision to strike down the Cadia copper royalties — on the ground that the NSW Government didn’t own the copper — is a vindication of Treasury secretary Ken Henry’s proposal for a federal resource rent tax to replace state royalties.
A federal RRT would be immune to disputes over ownership because it would rely on the power of taxation, not the prerogatives of owners.
The objection that the minerals generally belong to the states rather than the commonwealth is easily met by refunding the RRT from each mine to the state where the mine is located. And if the resource super profits tax was flawed (as I believe it was), then the appropriate response was to fix it — not to water it down as Julia Gillard proposes, let alone dump it as Tony Abbott proposes.