Treasure Wayne Swan sure mining tax will soon reap profits
DESPITE the mining tax failing to raise a cent in its first three months, Treasurer Wayne Swan, on Thursday, stood by Treasury forecasts that the tax would still raise $4.3 billion in the next nine months.
Originally estimated to bring in some $13.4 billion over four years from July 1, the revenue derived from the Minerals Resource Rent Tax was downgraded to $9.1 billion on Monday.
The tax was aimed at the high profits of the mining sector, with BHP, Rio Tinto and Xstrata expected to pay the bulk, if not entirety, of the tax.
A report in The Australian on Thursday revealed the government tax receipts showed "zero revenue" from the MRRT, which Mr Swan neither confirmed nor denied.
He said he could not go into detail about individual companies and their tax receipts, but a statement from his office said the "whole point of the tax" was to raise more money when industry profits were higher, and less when they were lower.
"The projected revenue from the MRRT was written down in our mid-year update by $4.3 billion, reflecting weaker market conditions, and we stand by those forecasts," a spokesman said.
The reports come less than six months after Mr Swan launched his "Fair Go Budget", touting spreading the benefits of the mining boom to other industries and regions in the country.
It also shows the volatile nature of profits-based taxes, which after a sudden, largely unexpected fall in commodity prices of about 40% for iron ore and coal, has been laid bare.
The Petroleum Resource Rent Tax, which has been operating since 1998, has continued to confound Treasury analysts, with the difference between forecasts and the reality of the tax revenue differing significantly most years
That tax raised some 44% less in the 1998-99 fiscal year, while it raised nearly twice the forecast revenue in 2000-01 and more recently raised 21% less than forecast in 2010-11.
In a market update released on Monday, Deloitte Access Economics senior economist Chris Richardson wrote a supply surge and weaker Chinese demand for the two crucial minerals had converged to send commodity prices into a free fall.
Mr Richardson wrote that while Deloitte's forecasts did include a fall in commodity prices, it was expected over a two to three-year period, but that drop had actually occurred in two or three months.
The Monday release of the government's half-yearly budget update, unusually brought forward to mid-October, coincided with the Australian Tax Office's due date for tax receipts from the mining companies.
The early release date of the MYEFO meant the mining tax receipts were not included.
Neither the ATO nor Treasury officials would release the actual tax receipts, in part due to the possibility of breaching the privacy act due to the low number of businesses paying the MRRT.
Opposition treasury spokesman Joe Hockey told reporters in Sydney not even the most incompetent government would introduce a tax which raised no money.
"The second thing which needs to be noted - the absolute deceit of the government in bringing forward the mid-year economic update to Monday on the very same day that the receipts of the revenue of the mining tax were being lodged with the Tax Office," he said.
"The Government knew nothing was coming in and, therefore, they still pretended to have a $2 billion receipt in the mining tax this year."
Among the programs the tax was meant to fund was the further two rounds of the $2 billion Regional Development Australia Fund, but Regional Australia Minister Simon Crean on Wednesday announced the next rounds of the funding program remained secure.