Minerals Resource Rent Tax Repeal and
of Representatives, 13 November 2013
The Minerals Resource Rent Tax Repeal and Other Measures Bill 2013 (the
bill) seeks to repeal the mineral resources rent tax (MRRT) by repealing a
number of Acts (Schedule 1). It would also make consequential amendments to
other legislation, required as a result of the repeal of the MRRT (Schedules 2
The MRRT has applied from 1 July 2012 to taxable resources (broadly,
iron ore and coal) after they are extracted from the ground but before they
undergo any significant processing or value adding. Coal seam gas produced as a
necessary incident of coal mining was also included as a taxable resource. The
effect of the bill would be that taxpayers do not incur liabilities for MRRT on
or after 1 July 2014. However, the amendments do not affect the rights, powers
and obligations of taxpayers and the Commissioner of Taxation in respect of
MRRT liabilities that arise before that date.
This bill would also repeal the following MRRT-related measures:
loss-carry back (Schedule 2); geothermal expenditure deduction (Schedule 5); low-income
superannuation contribution (Schedule 7); income support bonus (Schedule 8);
and schoolkids bonus (Schedule 9).
In addition, the bill would revise the following MRRT-related measures:
capital allowances for small business entities (Schedules 3 and 4); and
superannuation guarantee charge percentage increase (Schedule 6).
The committee reported on the bill in its First Report of the 44th
The Senate negatived the second reading of the bill on 25 March 2014 and
the bill is therefore not proceeding.
Committee view on compatibility
Right to an adequate standard of
living and right to social security
Reduction in superannuation
The committee sought clarification as to whether the measures contained
in Schedules 6 and 7 of the bill (relating to the superannuation guarantee and low-income
superannuation contribution, respectively) are consistent with the right to an
adequate standard of living and the right to social security.
The committee sought clarification whether the measures proposed by
Schedules 8 and 9 (relating to the income support bonus and schoolkids bonus,
respectively) will be accompanied by appropriate mechanisms to monitor and
address any disproportionate impact the cessation of these payments may have on
disadvantaged individuals, children and families, particularly if they cause
Parliamentary Secretary's response
Schedules 6 and 7
For the MRRT Repeal Bill, the Committee sought clarification
as to whether the superannuation guarantee (SG) and the low income
superannuation contribution (LISC) measures contained in Schedules 6 and 7 of
the Bill are compatible with the right to an adequate standard of living and
the right to social security.
The LISC repeal and the SG rephase are occurring in the
context of fiscal savings for the Government. These measures were linked to the
failed Minerals Resource Rent Tax with the Government borrowing money to pay
for these commitments. Repealing the LISC and rephrasing the SG needs to be
seen in this context and will assist in repairing the damage done to the
The Government is comfortable the measures set out in
Schedules 6 and 7 of the MRRT Repeal Bill are compatible with human rights.
Schedules 8 and 9
The Committee also sought clarification on whether the
amendments in Schedules 8 and 9 to remove the Income Support Bonus and
Schoolkids Bonus will be accompanied by appropriate mechanisms to monitor and
address any undue hardship the cessation of these payments may cause to
vulnerable individuals and families.
There are no specific mechanisms to monitor the impact of the
repeal of the Schoolkids Bonus or Income Support Bonus. However, people
experiencing financial hardship may access existing support services delivered
by Centrelink and other Government funded services.
The committee thanks the Parliamentary Secretary to the Treasurer
for his response. Noting that the bill is not proceeding, the committee has
concluded its examination of this bill.
However, the committee notes that the Parliamentary Secretary's response
did not provide a detailed and evidence-based explanation for the measures. The
response simply states that the 'LISC repeal and the SG rephrase are occurring
in the context of fiscal savings for the Government'. The committee notes that,
to demonstrate that a limitation is permissible, legislation proponents must
provide reasoned and evidence-based explanations of why proposed measures are
necessary in pursuit of a legitimate objective, and are reasonable and
proportionate means to achieve that objective.
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