matt makes some good points in his case for the repeal. I think he's right that we shouldn't punish efficiency, and I agree that we should charge appropriate amounts for mining licences.

However I think the notions of fairness and punishment - whilst often useful - cloud this particular issue, and we shouldn't use them in either the for or the against cases. The more relevant issues are that they're Australian assets, that the current market is impermanent, and that the current profits are, historically, unusually high. We''re very lucky that we have so much of what so many people want right now. We're temporarily in an unusually good market for what we happen to have a lot of. Good markets tend not to last forever, and a tax on what are unusually high profits still allows a respectable rate of return for investors, and means both that the country has something put aside for when market conditions change, and that there's money available to help those whom this market disadvantages.

Punishment is the wrong way to think about a tax like this. Such a tax is a contribution to the good of the country, by someone who is temporarily in an unusually good position to so contribute. It's not something governments do to be mean, it's what they do because countries cost money to run. It's like asking the tallest person in the room to change a lightbulb - we do it not to pick on them, but because they have what the job requires.

As many have already said, the matter of ownership is central to this issue. It seems fairly clear that the resources belong to the Australian people and so we should derive a fair profit from their sale. That being said, there are many ways in which a tax on mining could be structured. The system of mineral royalties was clearly innadequate. For this reason the current MRRT seems an improvement, although it is far from perfect.

Unlike other forms of economic activity mining is a once off. Once the minerals have been dug up - they're gone as is any revenue associated with them. And the minerals aren't going anywhere - if a tax goes too far, then it can be relaxed to re-attract mining investment at a future time when market prices are likely to be much higher and costs of extraction much lower. If anything this tax is too weak and needs to be strengthened to ensure that it captures the maximum amount of revenue for the good of the country rather than concentrating it in the hands of a few rich individuals and multi-national companies.

Taxing this activity is also a way of paying for the infrastructure that is specifically created for the purposes of the mining industry (unlike most other forms of infrastructure which is used for a broader range of economic activity). The amount of direct and indirect subsidies for the mining industry are pretty crazy - it's not clear that the mining companies are actually a net taxpayer when all this is taken into account.

To the extent that a mining tax transfers some profit gained from the extraction of ore to the citizens who collectively own the land on which it is found, I think such a tax would be beneficial, all else being equal, to the society as a whole. I am concerned by how well the current tax meets this objective without collateral damage, but I think its benefits probably already outweigh its costs and that it should be just as likely that parliament will improve it from its current state as create a better-designed tax some time in the near future after it is repealed. For completeness, my main concerns with the current tax are that it might be harmful to competition by hurting smaller mining companies more than large ones and that it will create incentives for and the additional complexity to facilitate more bookkeeping obfuscation techniques on the part of large mining companies to conceal profits, introducing new inefficiencies and further harming competition because big companies are better at legal tax evasion than small ones. I would add that I think Matt's point that charging for profits punishes efficiency is a good one, but that having a bureaucracy decide on a flat resource tax would probably be worse because it could easily cause the opportunity for profit to fall below zero for some enterprises, especially the most speculative ones and it would be most harmful of all to the smallest, most entrepreneurial market players. Taxing profits might reduce the incentive to be efficient, but it never eliminates it.

Assuming that we accept a need for tax, there seem to me two key criteria for this issue: one is the "fairness" of the level of tax on an industry, and the other is the strategic advantage (or not) to Australia. According to a Treasury paper by John Clark et al [1], we should judge the level of tax by the effective company tax rate -- the ratio of company tax to corporate profits. I can't find the exact ratios for Australian industry, but based on ABS figures [2] and the Henry Tax Review [3], it seems that Mining pays a significant lower effective company tax rate than other industries. Even using a criteria of a flat tax rate (which is debatable), it would seem on this criterion that Mining should pay the extra Mining tax.

Strategically, we should worry that higher taxes will cause mining investors to look elsewhere. However, even the industry literature acknowledges that pretty much all other countries are looking to raise taxes to get more from their mining industry [4]. So, depending on the level of tax, Australia doesn't seem to put itself at a strategic disadvantage with the Mining Tax.

[1] http://www.treasury.gov.au/documents/1304/HTML/docshell.asp?URL=01Companytax.asp [2] relevant stats from ABS at crikey: http://blogs.crikey.com.au/pollytics/2010/06/15/how-profitable-is-mining/ [3] relevant stats from Henry Tax Review at Peter Martin's blog: http://www.petermartin.com.au/2010/05/so-what-effective-tax-rate-do-mining.html [4] http://www.miningaustralia.com.au/slider/taxing-times---a-look-at-global-mining-tax-regimes

It is difficult to unpick the issue in just a few paragraphs, but in brief, I agree with many of the sentiments that have been expressed. I recognise the contribution that mining makes to the economy (and living in WA, I know many people who's careers depend on mining). However, I also believe that the balance it out of whack, and that taxpayers are not receiving a fair share of the benefits. I also understand that one of the original objectives of the super profits tax was to try to even out the "two-speed economy" and mitigate the boom-bust cycle, which I think are worthwhile goals.

Having said all that, I think the current incarnation of the tax is probably a bad compromise, and should be replaced by something that makes better sense. I don't support its repeal mainly for tactical reasons: if repealed, it will likely not be replaced.

I was also interested to read Toqueville's comment supporting the proposition (which I thought was quite reasonable despite the fact that my view differs from his/hers). There is some discussion of the figures he mentions in the following article (which is about examining the mining industry claims in more depth):

http://www.theglobalmail.org/feature/what-lies-beneath/197/

As Australian citizens, we own these minerals. The companies we sub-contract to perform the relatively simple task of digging our assets out of the ground and selling them for us have a right to a finder's fee and a reasonable profit for their shareholders. As the owners of the assets however, it makes no sense to allow these sub-contracted earth removalists to take most of the money from a boom in the price of our assets. The Mining tax is only a step in the right direction to redress the balance.

The minerals are a national resource. Not everyone can be a miner or employed in mining. The nation as a whole (ie everyone) should benefit to some degree from the minerals. Likewise the mining companies that take a risk and make the initial investments are should be rewarded for that risk and investment. The mining tax is structured such that both can occur. To repeal the tax would make the equation lopsided again. It is inequitable that a few should earn more than they can ever need, more than their next three generations of heirs can ever need, from a national resource if the nation as a whole cannot too become wealthier as a whole.

The balance towards Corporate and Big Business interests and away from the public interest is way, way out. This tax is a (very small) step in the right direction. The fact that the mining lobby has - with some success - perverted the democratic process is another reason not to bow down to their selfish demands. Fair go!

This Robin Hood-style tax is one of those instances where Government intervention can be seen as beneficial to most people in the way that it distributes the wealth extracted from our national resources to more parts of the nation. I support the Mining Tax.

The annual ratings by Denver based mining consultants Behre Dolbear rated Australia as the top nation to locate mining projects. It is the third year in a row Australia was listed as the best for miners. This fact shows that all the bluster and scaremongering by the Opposition appears to be falling on deaf ears when it comes to investment in the mining industry. The MRRT is a just tax but should have gone further as I feel the Government squibbed in the face of the opposition by mining companies. Any notion to repeal the mining tax by the Opposition is just a con job to get elected and would be foolish. The Opposition wasted this resource in the best of times while in government by not placing a tax on minerals. Imagine all the wonderful infrastructure and opportunities Australia could have today.

From my simple perspective, it feels that the mining boom is cannabalising other parts of the Australian Economy. All of our economic indicators point to the country doing very well at the moment. The problem is that the goliath size of the mining sector's contribution is offsetting/hiding the fact that most of the country is starting to find things more difficult. The increase in the value of our dollar is destroying the export potential any value add industries like manufacturing and education. When these industries contract it isn't easy to get them back again.

If we are going to mine our country as fast as we possibly can, then we need to make some hay while the sun shines and that means putting the excess wealth into a sovereign fund to move our country's wealth from the ground to income producing assets like some other forward thinking countries. The funds from a Mining Tax should be used for this purpose.

There are some general principles that should be used to place this issue into the correct context: 1. The mineral resources are owned by all Australians 2. They can only be dug up and sold ONCE 3. All Australians should benefit from this 4. The benefit should be used to set up an alternative income stream for the country that will take over when the minerals run out The current debate is about how this should be done. The "Mining Tax" is a mess, it is inadequate and poor in its scope and implementation, but it is still an improvement and should be retained until a better system is developed to replace it.

Like Norway, we need to limit our mining earnings in order to maintain a viable, exporting manufacturing industry. In a country with a smaller population, domestic sales are not enough. If mining exports keep the dollar high, we will end up with no domestic manufacturing industry at all.

I oppose the mining tax being repealed because even though it costs a lot of money to establish a mine, the profits generated are so enormous, that there is still plenty of money left to pay the tax, and therefore benefit everyone.

In economics, there are three ways to make an 'extraordinary' profit i.e. one above the market rate: you can either innovate (mostly a good thing, unless over-captured by patents), make money by being a monopoly (almost always a bad thing) or make money off owning resource (so called resource rents). Now the reason we tax resources to beging with are the last kind- why are these 'resource rents' so worth taxing? Because the company in question just makes profit off of its more accessible resource, thus allowing it to drive other companies with viable but not quite as accessible resources out of the market. So, why tax them more than previously? Well it is worth noting that this tax only applies to 'super profits', not ordinary accounting profits, just a slice above a certain proportion. It is also worth noting that mining actually hurts other industries in Australia by pulling the dollar's value up and hurting other exports. So morally speaking, miners should have to contribute something back. Now, there's arguments to be made about whether the government will spend the money well, but the tax itself is well constructed.

I oppose repealing this because the tax will not affect the viability of the resources industry - regardless of what the bleeding heart mining billionaires say. All that will be affected is their share of the spoils. Of course, if they all paid their fair share of income taxes like the rest of us it might change the picture a little - but not much.

Let's drop the word tax which implies the divine right of kings to tax their subjects and think of contribution to the common wealth of a democracy. As such mining companies need to contribute to the common wealth. As much of the corporate sector is not locally owned the contribution expected is reasonable Cheers Tim

I'd be more inclined to support the repeal if I thought there was support for a better tax. But I don't see that - those opposed to the current tax seem to be either: opposed to tax in general (in some cases, only tax paid to Labour governments); or opposed to any super-tax. I think it's unlikely we'd get a better tax if this one was repealed - those opposed would see repeal as a win and not be inclined to back an alternative.

I think the entire point is that it cuts in well over any reasonable rate of return. Which is why it doesn't need any offset ability - "failure to make extremely high profits" is not reasonably a tax loss situation. What justifies the tax, IMO, is that normally mining is high risk - most mining ventures fail. But Australian coal and iron mines are not like that this decade, the question is just how profitable they will be. So taxing that excess profitability is justified for all the other reasons listed.

Oz needs to extract as revenue as possible to fund expenses that are essential to the future of our small (great?) nation. It may be that the method of extraction is flawed but never the less we need giga dollars to fund only our infrastrcture let alone those other items such as local manufacture, R&D, education of the ignoramus,etc,etc.

I see resources as a national asset which should provide national returns. We want to live in a country with high quality, equitable healthcare, education, roads etc etc and this needs to be funded from somewhere. I feel that government is often to suseptible to the fear campaigns orchestrated by special interest groups and hope that this issue doesn't follow the same path, though already there has been major concessions made from the original proposal and the ideas espoused in the Henry Review.

Take the wealth created by Australian resources and build a luxurious cruise ship, using Chinese labour, for wealthy Europeans and Americans to float about the Atlantic on...Nice one CLIVE!

My view centers on the notion of access and equity. It's a Super Profits tax and as such, it's only fair that some of that extreme wealth be made available for the greater benefit of the society that contains the product.In some sense it could be seen as a form of compelled philanthropy.

The asset should be shared by all (Australians)

Certainly the structure of the current mining tax is inadequate but repealing it opens the dangerous possibility of it being further eroded. It is a miracle it got through in the first place. I agree with earlier comments - as our minerals can only be mined once this is the only chance to provide an economic regulation that will help the activity to contribute to our economy in a long term sustainable way.

We need to re-invest into the future of Australian industry rather than 'propping' up our nation by selling off our natural resources. I have worked with some of the mining companies as an external consultant and I witnessed some of the worst penny pinching tactics I have ever come across in business, they are certainly loathe to engage Australian industries. If we didn't have the natural resources to offer than what would we currently offer? not a lot beyond education and now that is being recreated overseas We need to protect our natural resources, we also need to ensure that the people of Australia benefit form the proper investment that mining income can provide and above anything else, Australia needs to work out what she is when the natural resources have gone.

Mining extracts and sells substances that belong to all Australians. Mining makes huge profits by selling the assets of present Australians and future Australians. Also, bringing things from under the ground and putting them into circulation needs more consideration. A tax is a good first step towards dealing with these issues. If nothing else, it gets us talking about the issue.

Everything belongs to WA.

There's another compelling argument for a mining tax (i.e. against repealing it). We need to somehow put the brakes on the endless destruction of this land and the environment by the mining industry.

We need to repeal the entire monetary system! Taxing Miners is useless! Think about it, how else is it possible to implement the existing advanced technology, which could quickly be implemented globally, to give our planet a fighting chance at surviving. The whole system is on the brink of collapse. Why scramble after it is too late leaving war and epic disasters as the only scenario?