Footnotes

Executive Summary

[1]        Mr Mitch Hooke, Chief Executive Officer, Minerals Council of Australia, Proof Committee Hansard, 21 February 2012, p. 29.

[2]        Australian Bureau of Statistics, Private new capital expenditure and expected expenditure, cat. 5625.0, September 2011, p. 9.

Chapter 1 - Introduction

[1]        See Senate Standing Committee for the Scrutiny of Bills, Alert Digest, no. 14 of 2011, 23 November 2011, pp. 23–24.

Chapter 2 - The mining boom and the MRRT

[1]        Port Jackson Partners, Earth, Fire, Wind and Water: Economic Opportunity and the Australian Commodities Cycle, August 2011, p. 5.

[2]        Port Jackson Partners, Earth, Fire, Wind and Water: Economic Opportunity and the Australian Commodities Cycle, August 2011, p. 5 (footnotes omitted).

[3]        Dr Martin Parkinson, Secretary to the Treasury, 'The implications of global economic transformations for Australia', Treasury Economic Roundup, issue 4, 2011, p. 29.

[4]        Dr Philip Lowe, Deputy Governor, Reserve Bank of Australia, 'The Forces Shaping the Economy Over 2012', address to the Committee for Economic Development of Australia, 16 February 2012, www.rba.gov.au/speeches/2012/pdf/sp-dg-160212.pdf, pp 5-6 (accessed 24 February 2012).

[5]        Mr John McKillop, Chair, NFF Economics Committee, National Farmers' Federation, Committee Hansard, 22 February 2012, p. 49.

[6]        Dr David Gruen, Executive Director, Macroeconomic Group (Domestic), Department of the Treasury, Proof Committee Hansard, Additional Estimates 2011–12, 16 February 2012, p. 17.

[7]        Australian Government, 2011–12 Budget – Budget Paper No. 1, statement 5, p. 14.

[8]        Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol 1, December 2009, p. 217.

[9]        Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol 1, December 2009, p. 217.

[10]      Australia's Future Tax System Review, Report to the Treasurer, overview, December 2009, pp. 171–72.

[11]      Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol 1, December 2009, p. 218.

[12]      Professors John Freebairn and John Quiggin, 'Special Taxation of the Mining Industry', Economic Papers, vol. 29, no. 4, December 2010, p. 385.

[13]      Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol 1, December 2009, p. 222.

[14]      Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol 1, December 2009, p. 229.

[15]      Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol 1, December 2009, p. 225.

[16]      Professor John Quiggin, Submission 32, p. 3.

[17]      Institute of Public Affairs, Submission 12, p. 3.

[18]      Fortescue Metals Group Ltd, Submission 26, p. 5.

[19]      Mr Julian Tapp, Director, Strategy, Fortescue Metals Group, Proof Committee Hansard, 21 February 2012, p. 45.

[20]      Dr Alan Moran, Director, Deregulation Unit, Institute of Public Affairs, Proof Committee Hansard, 21 February 2012, p. 13.

[21]      Dr Alan Moran, Director, Deregulation Unit, Institute of Public Affairs, Proof Committee Hansard, 21 February 2012, p. 21.

[22]      As outlined in chapter 1, six other bills were introduced at the same time as part of the overall MRRT package.

[23]      House of Representatives Hansard, 2 November 2011, p. 12412.

[24]      Association of Mining and Exploration Companies, Submission 11, p. 1.

[25]      Fortescue Metals Group Ltd, Submission 26, p. 5.

[26]      Mr Mitch Hooke, Chief Executive Officer, Minerals Council of Australia, Proof Committee Hansard, 21 February 2012, p. 35.

[27]      Australian Council of Trade Unions, Submission 9, pp. 5-6.

[28]      Professor John Quiggin, Committee Hansard, 22 February 2012, p. 2.

[29]      Institute of Public Affairs, Submission 12, p. 17.

[30]      Institute of Public Affairs, Submission 12, p. 18.

[31]      Fortescue Metals Group Ltd, Submission 26, p. 3.

[32]      Scott Komp-Harms and Kali Sanyal, 'The Minerals Resource Rent Tax – selected concepts and issues', Parliamentary Library Background Note, 24 November 2011, p. 3.

Chapter 3 - How the Minerals Resource Rent Tax works

[1]        The nominal rate of tax is 30 per cent, however, this is discounted by a 25 per cent extraction allowance.

[2]        All bolded terms are defined terms in the MRRT bills.

[3]        Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,  pp. 3–4.

[4]        See Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, pp. 12–17, for a more detailed explanation of the vanilla case.

[5]        See Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, pp. 17–20, for a more detailed explanation of the existing investments case.

[6]        See Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, pp. 20–26, for a more detailed explanation of the multiple projects case and pre‑mining expenditure rules.

[7]        Minerals Resource Rent Tax Bill 2011, subclause 30-25(1).

[8]        Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 8.

[9]        Minerals Resource Rent Tax Bill 2011, subclause 30-25(3).

[10]      Minerals Resource Rent Tax Bill 2011, clause 35-10.

[11]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, p. 76.

[12]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, pp. 77–79.

[13]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, p. 8.

[14]      For a more detailed explanation of the operation of mining allowances see Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, chapters 6 and 7, pp. 95–143.

[15]      The uplift rate is an annual interest allowance provided to compensate for risk where losses are required to be carried forward and offset against future project profits.

[16]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, p. 119.

[17]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, p. 17.

[18]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, p. 17.

Chapter 4 - Revenue from the Minerals Resource Rent Tax

[1]        Australian Government, Mid-Year Economic and Fiscal Outlook 2011–12, 'Appendix A: Policy decisions taken since the 2011–12 Budget', p. 167.

[2]        Australian Government, Mid-Year Economic and Fiscal Outlook 2011–12, 'Part 1: Overview', p. 4.

[3]        Australian Government, 2011–12 Budget – Budget Paper No. 1, statement 5, p. 29.

[4]        Adrian Rollins and David Crowe, 'Swan unruffled by "variable" mining tax', Australian Financial Review, 13 February 2012, p. 5.

[5]        Australian Government, Mid-Year Economic and Fiscal Outlook 2011–12, p. 1.

[6]        Australian Government, Mid-Year Economic and Fiscal Outlook 2011–12, p. 4.

[7]        Mr Rob Heferen, Executive Director, Revenue Group, Department of the Treasury, Proof Committee Hansard, 21 February 2012, p. 63.

[8]        Professor John Quiggin, Committee Hansard, 22 February 2012, p. 2.

[9]        BDO Corporate Tax (WA) Pty Ltd, Submission No. 3, p. 4.

[10]      BDO Corporate Tax (WA) Pty Ltd, Submission No. 3, p. 5.

[11]      See Fortescue Metals Group Ltd, Submission 1 to House of Representatives Economics Committee Inquiry into the Minerals Resource Rent Tax Bills 2011, pp. 7-10.

[12]      The Hon. Wayne Swan MP, Deputy Prime Minister and Treasurer, letter to BDO Corporate Tax (WA) Pty Ltd dated 8 November 2011, www.treasury.gov.au/documents/2223/PDF/
MRRT_Response_Letter.pdf, (accessed 17 January 2012).

[13]      Institute of Public Affairs, Submission No. 12, p. 14.

[14]      Association of Mining and Exploration Companies, Submission 11, p. 5.

[15]      Mr Patrick Sedgley, Manager, Business Tax Working Group, Business Tax Division, Department of the Treasury, Proof Committee Hansard, 21 February 2012, p. 77.

[16]      Mr Rob Heferen, Executive Director, Revenue Group, Department of the Treasury, Proof Committee Hansard, 21 February 2012, p. 68.

[17]      NSW Government, Budget Statement 2011–12, p. 5-3.

[18]      Mr Rob Heferen, Executive Director, Revenue Group, Department of the Treasury, Proof Committee Hansard, 21 February 2012, p. 66.

[19]      Government of Western Australia, Budget 2011–12 – Economic and Fiscal Outlook, Budget Paper No. 3, May 2011, p. 75.

[20]      On 30 March 2011, the Australian government announced a review of the distribution of revenue from the GST to the states and territories, to be conducted by the Hon. Nick Greiner AC, the Hon. John Brumby and Mr Bruce Carter. The review will consider the long-term 'ability of States and Territories ... to deliver broadly equivalent levels of services and infrastructure to their residents', given the structural change in the economy; the Hon. Julia Gillard MP and the Hon. Wayne Swan MP, 'Review of GST Distribution', Joint media release, 30 March 2011.

[21]      Australian Government, GST Distribution Review, Terms of Reference, www.gstdistributionreview.gov.au/content/Content.aspx?doc=tor.htm (accessed 18 January 2012).

[22]      Mitchell Hooke, 'Mining sector defies spruikers of doom', The Australian, 5 January 2012, p. 16.

[23]      Sid Maher and Rowan Callick, 'Trade surplus shrinks on weak Asia demand for commodities', The Australian, 6 January 2012, p. 4.

[24]      Andrew Burrell, 'Boom times as mining giants spend billions on mega-projects', The Australian, 5 January 2012, p. 15.

[25]      Institute of Public Affairs, Submission 12, p. 3.

[26]      Institute of Public Affairs, Submission 12, p. 8.

[27]      Institute of Public Affairs, Submission 12, p. 11.

[28]      Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol. 1, December 2009, p. 222.

[29]      The Hon. Wayne Swan MP, Deputy Prime Minister and Treasurer, and the Hon. Martin Ferguson AM MP, Minister for Resources and Energy, 'Coalition would deny Australians the benefit of the mining boom', Joint Media Release, 20 November 2011.

[30]      Dr Martin Parkinson, Secretary to the Treasury; Dr David Gruen, Executive Director, Macroeconomic Group (Domestic), Department of the Treasury, Proof Committee Hansard, Additional Estimates 2011–12, 17 February 2012, p. 19.

[31]      Chamber of Minerals & Energy of Western Australia, Submission 2, p. 4.

[32]      Fortescue Metals Group Ltd, Submission 26, p. 4.

[33]      Institute of Public Affairs, Submission 11, p. 26.

[34]      Professor Henry Ergas, Senate Select Committee on the Scrutiny of New Taxes Hansard, Inquiry into a national mining tax, 30 March 2011, p. 11.

[35]      Mr David Flanagan, Executive Chair, Atlas Iron, Committee Hansard, 22 February 2012, p. 14.

[36]      Mr Simon Bennison, Chief Executive Officer, Association of Mining and Exploration Companies, Proof Committee Hansard, 21 February 2012, p. 61.

[37]      Australian Council of Trade Unions, Submission 9, p. 10.

[38]      Minerals Council of Australia, Submission 20, p. 4.

[39]      Mr David Richardson, Senior Research Fellow, The Australia Institute, Proof Committee Hansard, 21 February 2012, p. 22.

[40]      Author not stated, 'Wish you were mine', The Economist, 11 February 2012, http://www.economist.com/node/21547285 (accessed 21 February 2012). It should be noted that this article stated 'Australia is set to raise some $8 billion a year through a controversial new tax on miners'.

[41]      Mr Peter Colley, National Research Director, Mining and Energy Division, Construction, Forestry, Mining and Energy Union, Committee Hansard, 22 February 2012, p. 33.

[42]      Ayesha de Kretser, 'Hopes rise for iron ore exports', Australian Financial Review, 6 January 2012, p. 36.

Chapter 5 - Concerns of small and emerging miners

[1]        Association of Mining and Exploration Companies, Submission 11, p. 6.

[2]        Association of Mining and Exploration Companies, Submission 11, p. 5.

[3]        Association of Mining and Exploration Companies, Submission 11, p. 3.

[4]        The new resource taxation arrangements were announced by the government on 2 May 2010. Consequently, the starting base allowances is linked to this date, as the allowance is intended to recognise investments in certain assets that existed before the tax changes were announced (and certain expenditure on such assets made by a miner between 2 May 2010 and 1 July 2012).

[5]        See chapter 3 for more information on the calculation of a miner's liability under the MRRT.

[6]        Association of Mining and Exploration Companies, Submission 11, p. 5.

[7]        Mr Simon Bennison, Chief Executive Officer, Association of Minerals and Exploration Companies, Proof Committee Hansard, 21 February 2012, p. 55.

[8]        Professor Henry Ergas, Proof Committee Hansard, 21 February 2012, p. 7.

[9]        Mr Patrick Sedgley, Manager, Business Tax Working Group, Business Tax Division, Department of the Treasury, Proof Committee Hansard, 21 February 2012, p. 77.

[10]      Minerals Council of Australia, Submission 20, p. 21.

[11]      Minerals Council of Australia, Submission 20, p. 4.

[12]      Mr Rob Heferen, Executive Director, Revenue Group; Ms Kate Roff, Principal Advisor, Tax System Division; Mr James O'Toole Manager, Resource Taxation Unit, Indirect Tax Division, Department of the Treasury, Proof Committee Hansard, 21 February 2012, pp. 64–65.

[13]      Mr David Flanagan, Chief Executive, Atlas Iron, Committee Hansard, 22 February 2012, p. 23.

[14]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 120.

[15]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 119.

[16]      Fortescue Metals Group Ltd, Submission 26, p. 2.

[17]      Mr Julian Tapp, Director, Strategy, Fortescue Metals Group, Proof Committee Hansard, 21 February 2012, p. 46.

[18]      BDO Corporate Tax (WA), Submission 3, p, 7.

[19]      Mr John Murray, Director, Corporate Tax, BDO Corporate Tax (WA), Proof Committee Hansard, 21 February 2012, p. 50.

[20]      Mr David Flanagan, Chief Executive, Atlas Iron, Committee Hansard, 22 February 2012, p. 10.

[21]      Minerals Council of Australia, Submission 20, p. 22.

[22]      Minerals Council of Australia, Submission 20, p. 22.

[23]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 145.

[24]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 145.

[25]      Chamber of Minerals and Energy of Western Australia, Submission 2, p. 5.

[26]      Association of Mining and Exploration Companies, Submission 11, p. 6.

[27]      Association of Mining and Exploration Companies, Submission 11, pp. 6–7.

[28]      Chamber of Minerals and Energy of Western Australia, Submission 2, p. 5.

[29]      Association of Mining and Exploration Companies, Submission 11, p. 9.

[30]      Association of Mining and Exploration Companies, Submission 11, p. 7.

[31]      Association of Mining and Exploration Companies, Submission 11, pp. 7–8.

[32]      Association of Mining and Exploration Companies, Submission 11, pp. 7–8.

[33]      Association of Mining and Exploration Companies, Submission 11, p. 8.

[34]      Department of the Treasury, Submission 6 to the House of Representatives Standing Committee on Economics' inquiry into the Minerals Resource Rent Tax Bills 2011, pp. 3–4.

[35]      Policy Transition Group, Report to the Australian Government: New Resource Tax Arrangements, December 2010, p. 81.

[36]      Association of Mining and Exploration Companies, Submission 11, p. 10.

[37]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 148.

[38]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 145.

[39]      Chamber of Minerals and Energy of Western Australia, Submission 2, p. 6.

[40]      Chamber of Minerals and Energy of Western Australia, Submission 2, p. 6.

[41]      Chamber of Minerals and Energy of Western Australia, Submission 2, p. 6.

[42]      Association of Mining and Exploration Companies, Submission 11, p. 10.

[43]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 257. The AVM is a version of the 'retail price' or 'netback' method; under this method, mining revenue for supply, exportation or use of taxable resources is worked out from the miner's transactions relating to the taxable resources, with appropriate reductions for downstream operating costs, depreciation and returns on capital. See Minerals Resource Rent Tax Bill 2011, clause 175-1.

[44]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 269.

[45]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum,   p. 270.

[46]      Association of Mining and Exploration Companies, Submission 11, p. 7.

[47]      Mr David Richardson, Chief Financial Officer, Gindalbie Metals; Mr Derek Humphry, Chief Financial Officer, Brockman Resources, Proof Committee Hansard, 21 February 2012, p. 61.

[48]      Association of Mining and Exploration Companies, Submission 11, p. 8.

[49]      BDO Corporate Tax (WA), Submission 3, p, 7.

[50]      Association of Mining and Exploration Companies, Submission 11, p. 11.

[51]      Association of Mining and Exploration Companies, Submission 11, p. 12.

[52]      Chamber of Minerals and Energy of Western Australia, Submission 2, pp. 6–7.

[53]      Chamber of Minerals and Energy of Western Australia, Submission 2, pp. 6–7.

[54]      Association of Mining and Exploration Companies, Submission 11, p. 12.

[55]      Mr Paul McCullough, former General Manager, Business Tax Division, Department of the Treasury, House of Representatives Standing Committee on Economics Hansard, Inquiry into the Minerals Resource Rent Tax Bills 2011, 9 November 2011, p. 43.

[56]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, p. 52.

[57]      Minerals Resource Rent Tax Bill 2011, subclause 30-25(3). Asterisked terms are defined in the MRRT Bill.

[58]      Chamber of Minerals and Energy of Western Australia, Submission 2, p. 7.

[59]      Association of Mining and Exploration Companies, Submission 11, p. 13.

[60]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, p. 323.

[61]      Mr Simon Bennison, Chief Executive Officer, Association of Mining and Exploration Companies; Mr David Richardson, Chief Financial Officer, Gindalbie Metals, Proof Committee Hansard, 21 February 2012, pp. 56–57.

[62]      Mr Mitch Hooke, Chief Executive Officer, Mining Council of Australia, Proof Committee Hansard, 21 February 2012, p. 32.

[63]      Mr Mitch Hooke, Chief Executive Officer, Mining Council of Australia, Proof Committee Hansard, 21 February 2012, p. 34.

[64]      Mr Julian Tapp, Director, Strategy, Fortescue Metals Group, Proof Committee Hansard, 21 February 2012, p. 43.

[65]      Fortescue Metals Group Ltd, Submission 26, p. 8.

[66]      Association of Mining and Exploration Companies, Submission 11, p. 12.

[67]      Fortescue Metals Group Ltd, Submission 26, p. 2.

[68]      Fortescue Metals Group Ltd, Submission 26, p. 9.

[69]      Fortescue Metals Group Ltd, Submission 26, p. 9.

[70]      Policy Transition Group, Report to the Australian Government – New Resource Taxation Arrangements, December 2010, p. 51.

[71]      Mr Julian Tapp, Director, Strategy, Fortescue Metals Group, Proof Committee Hansard, 21 February 2012, p. 44.

[72]      Mr Rob Heferen, Executive Director, Revenue Group; Mr James O'Toole, Manager, Resource Taxation Unit, Indirect Tax Division, Department of the Treasury, Proof Committee Hansard, 21 February 2012, pp. 63-64.

[73]      While it is estimated that magnetite ore represents 34 per cent of Australia's iron ore resources, the vast majority of which are located in Western Australia, only two magnetite projects are currently operating—one in South Australia and one in Tasmania. Two further projects are currently under construction in Western Australia. See Geoscience Australia, Australia's identified mineral resources 2010, p. 34 and Ms Megan Anwyl, Executive Director, Magnetite Network, Committee Hansard, 22 February 2012, p. 24.

[74]      Magnetite Network, Submission 24, p. 2.

[75]      Magnetite Network, Submission 24, p. 4.

[76]      Magnetite Network, Submission 24, p. 3.

[77]      Magnetite Network, Submission 24, p. 2.

[78]      Ms Megan Anwyl, Executive Director, Magnetite Network, Committee Hansard, 22 February 2012, p. 29.

[79]      Magnetite Network, Submission 24, p. 4.

[80]      Magnetite Network, Submission 24, p. 5.

[81]      Ms Megan Anwyl, Executive Director, Magnetite Network, Committee Hansard, 22 February 2012, pp. 25–26.

[82]      Minerals Council of Australia, Submission 20, p. 21.

[83]      Mr Julian Tapp, Director, Strategy, Fortescue Metals Group, Proof Committee Hansard, 21 February 2012, pp. 40, 46.

[84]      For example, see Ainslie van Onselen, 'Mining tax calls for fresh advice', The Australian, 16 September 2011.

[85]      Senate Select Committee on the Scrutiny of New Taxes, The Mining Tax: A bad tax out of a flawed process, June 2011, p. 161. 

[86]      Mr Paul McCullough, Department of the Treasury, House of Representatives Standing Committee on Economics Hansard, 8 November 2011, p. 13.

[87]      House of Representatives Standing Committee on Economics, Advisory Report on the Minerals Resource Rent Tax Bill 2011 and related bills, November 2011, p. 45.

[88]      Fortescue Metals Group Ltd, Submission 26, pp. 10–12.

[89]      Institute of Public Affairs, Submission 12, p. 23.

[90]      Minerals Resource Rent Tax Bill 2011 and related bills, Revised Explanatory Memorandum, p. 3.

[91]      Fortescue Metals Group Ltd, Submission 26, pp. 11–12.

[92]      Fortescue Metals Group Ltd, Submission 26, p. 12.

[93]      Institute of Public Affairs, Submission 12, p, 21.

[94]      Department of the Treasury, 'Constitutional legality of the minerals resource rent tax and the petroleum resource rent tax', released 20 January 2012, www.treasury.gov.au/contentitem.asp?
NavId=087&ContentID=2292 (accessed 23 January 2012). 

[95]      Department of the Treasury, 'Constitutional legality of the minerals resource rent tax and the petroleum resource rent tax', released 20 January 2012, www.treasury.gov.au/contentitem.asp?
NavId=087&ContentID=2292 (accessed 23 January 2012). 

[96]      Department of the Treasury, 'Constitutional legality of the minerals resource rent tax and the petroleum resource rent tax', released 20 January 2012, www.treasury.gov.au/contentitem.asp?
NavId=087&ContentID=2292 (accessed 23 January 2012). 

[97]      Policy Transition Group, Report to the Australian Government: New Resource Tax Arrangements, December 2010, p. 81.

Chapter 6 - Extension of the Petroleum Resource Rent Tax

[1]        At present, the North West Shelf project (where Commonwealth crude oil excise and royalties apply) and the Joint Petroleum Development Area (a region in the Timor Sea jointly managed by the Governments of Australia and East Timor and governed by the Timor Sea Treaty (2003)) remain outside the PRRT. Department of Resources, Energy and Tourism, 'The History of Petroleum Resource Rent Tax (PRRT)' www.ret.gov.au/resources/enhancing/taxation/prrt/
Pages/TheHistoryofPetroleumResourceRentTax(PRRT).aspx, 17 January 2011 (accessed 9 November 2011).

[2]        Under the proposed arrangements, the Joint Petroleum Development Area in the Timor Sea will continue to be outside the PRRT regime.

[3]        The Bass Strait project came under the PRRT arrangements from 1 July 1990.

[4]        The Federal Court has observed that while the term 'project' and the boundaries of petroleum projects are not explicitly defined, they are informed by other sections and linked to production licences by section 19 of the Petroleum Resource Rent Tax Assessment Act 1987 (PRRTA Act). A licence area does not constitute the entirety of a petroleum project—a project can include activities which are related to the project but which take place outside the licence area         Esso Australia Resources Pty Ltd v Federal Commissioner of Taxation (2011) 194 FCR 32, 79, 80 (Middleton J); Petroleum Resource Rent Tax Assessment Amendment Bill 2011 and related bills, Explanatory Memorandum, p. 9.

[5]        A marketable petroleum commodity is currently defined as any one of five specified products (stabilised crude oil; sales gas; condensate; liquefied petroleum gas; and ethane), as well as any other product prescribed by regulations, which is produced from petroleum and is in its final form for the purpose of sale, use as a feedstock for conversion to another product or direct consumption as energy. The PRRT Bill seeks to amend this definition to add shale oil as a specified product.

[6]        Petroleum Resource Rent Tax Assessment Act 1987, Part V, Division 3.

[7]        Excluded expenditure includes, among other things, financing costs, dividend payments, certain indirect payments and costs and payments of income tax and GST.  

[8]        Australian Taxation Office, 'Petroleum resource rent tax: overview', 17 August 2009, www.ato.gov.au/businesses/content.aspx?doc=/content/39230.htm&pc=001/003/117/001/001&mnu=44895&mfp=001&st=&cy (accessed 6 December 2011).

[9]        Geoscience Australia and ABARE, Australian Energy Resource Assessment, 2010, p. 95.

[10]      Australian Energy Regulator, State of the Energy Market 2011, December 2011, p. 79. Geoscience Australia and ABARE noted in 2008 that while coal seam gas accounted for about 12 per cent of Australia's gas resources that are classified as 'economically demonstrated', there are substantial subeconomic demonstrated resources and very large reserves classified as 'inferred' and 'in-ground potential' which may total over 150 000 PJ—many times larger than the current level of economic demonstrated coal seam gas resources. Geoscience Australia and ABARE, Australian Energy Resource Assessment, 2010, pp. 96–98.

[11]      Australian Energy Regulator, State of the Energy Market 2009, December 2009, p. 31; State of the Energy Market 2011, December 2011, p. 80.

[12]      Geoscience Australia and ABARE, Australian Energy Resource Assessment, 2010, p. 69.

[13]      Geoscience Australia, 'Oil Shale', 30 March 2011, www.ga.gov.au/energy/petroleum-resources/oil-shale.html (accessed 5 December 2011).

[14]      Australian Bureau of Statistics, 'Mineral and Petroleum Exploration', cat. 8412.0, June 2011.

[15]      Petroleum Resource Rent Tax Assessment Amendment Bill 2011 and related bills, Explanatory Memorandum, p. 8.

[16]      Petroleum Resource Rent Tax Assessment Amendment Bill 2011 and related bills, Explanatory Memorandum, pp. 7–8.

[17]      The Explanatory Memorandum notes that '[i]n practice, this will only have an effect to the extent that a State directly recovers its own petroleum resources. In that case, the State will not be subject to PRRT'. Petroleum Resource Rent Tax Assessment Amendment Bill 2011 and related bills, Explanatory Memorandum, p. 8.

[18]      The North West Shelf project is subject to Commonwealth crude oil excise under the Excise Tariff Act 1921 and petroleum royalties under the Petroleum (Offshore) Royalty Act 2006.

[19]      Petroleum Resource Rent Tax Assessment Amendment Bill 2011, schedule 3, item 14.

[20]      Petroleum Resource Rent Tax Assessment Amendment Bill 2011 and related bills, Explanatory Memorandum, p. 67.

[21]      Petroleum Resource Rent Tax Assessment Amendment Bill 2011, schedule 4, item 10. The detailed provisions for calculating the starting base amounts will be included in a new schedule 2 to the PRRTA Act (schedule 4 to the PRRT Bill).

[22]      Starting base assets include all types of legal property and rights related to a project interest. The definition is based on that used for a capital gains tax asset under income tax law. See Petroleum Resource Rent Tax Assessment Amendment Bill 2011 and related bills, Explanatory Memorandum, p. 74.

[23]      Policy Transition Group, Report to the Australian Government: New Resource Taxation Arrangements, December 2010, p. 107.

[24]      Petroleum Resource Rent Tax Assessment Amendment Bill 2011 and related bills, Explanatory Memorandum, p. 3.

[25]      Australian National Audit Office, Administration of the Petroleum Resource Rent Tax, Audit Report No. 33 2008–09, p. 32; based on ATO information.  Figures reflect the number of PRRT registrations and projects as at 3 October 2008, and the number of PRRT group companies and projects that paid PRRT in 2007–08.

[26]      Petroleum Resource Rent Tax Assessment Amendment Bill 2011 and related bills, Explanatory Memorandum, p. 3.

Chapter 7 - Using the benefits of the mining boom to increase retirement savings

[1]        Australian Prudential Regulation Authority, 'A recent history of superannuation in Australia', APRA Insight, issue 2, 2007, p. 3.

[2]        Australian Prudential Regulation Authority, 'A recent history of superannuation in Australia', APRA Insight, issue 2, 2007, pp. 4–7.

[3]        Mr Gerard Noonan, President, Australian Institute of Superannuation Trustees, Committee Hansard, 22 February 2012, p. 68.

[4]        Australian Government, Australia to 2050: future challenges—the 2010 intergenerational report, February 2010, p. 1.

[5]        Mr Ian Silk, Chief Executive Officer, AustralianSuper, Committee Hansard, 22 February 2012, p. 62.

[6]        The Hon. Bill Shorten MP, Minister for Financial Services and Superannuation, Second Reading Speech, Superannuation Guarantee (Administration) Amendment Bill 2011, House of Representatives Hansard, 2 November 2011, pp. 12420–21.

[7]        Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol. 1, December 2009, p. 114.

[8]        The Hon. Bill Shorten MP, Minister for Financial Services and Superannuation, Second Reading Speech, Superannuation Guarantee (Administration) Amendment Bill 2011, House of Representatives Hansard, 2 November 2011, p. 12420.

[9]        Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, Revised Explanatory Memorandum, p. 27.

[10]      The Hon. Bill Shorten MP, Minister for Financial Services and Superannuation, Second Reading Speech, Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, House of Representatives Hansard, 2 November 2011, pp. 12418–19.

[11]      Financial Services Council, Submission 1, p. 4.

[12]      Additionally, because Treasury consider wages are lower with compulsory superannuation, pension payments will also be lower as they are indexed to wages. See Dr David Gruen and Leigh Soding, 'Compulsory superannuation and national saving', Treasury Economic Roundup, issue 3, 2011, p. 52.

[13]      Financial Services Council, Submission 1, p. 4. See The Hon. Julia Gillard MP, Prime Minister, 21 August 2011, www.pm.gov.au/press-office/speech-financial-services-council-breakfast-sydney (accessed 31 January 2012).

[14]      Rice Warner Actuaries, Superannuation Saving Gap at 30 June 2009, October 2010; cited in Financial Services Council, Submission 1, p. 1. For purposes of estimating this gap, an adequate level of retirement savings is considered to be 62.5 per cent of pre-retirement income.

[15]      Financial Services Council, Submission 1, p. 2.

[16]      AustralianSuper, Submission 5, p. 2.

[17]      Mr Ian Silk, Chief Executive Officer, AustralianSuper, Committee Hansard, 22 February 2012, p. 60.

[18]      Australian Council of Trade Unions, Submission 9, p. 13.

[19]      Australian Chamber of Commerce and Industry, Submission 14, pp. 8–9, 15.

[20]      Australian Chamber of Commerce and Industry, Submission 14, p. 22.

[21]      Mr John McKillop, Chair, NFF Economics Committee, National Farmers' Federation, Committee Hansard, 22 February 2012, p. 49.

[22]      Committee Hansard, 22 February 2012, p. 46.

[23]      Australian Chamber of Commerce and Industry, Submission 14, pp. 14–15.

[24]      Mr John McKillop, Chair, NFF Economics Committee, National Farmers' Federation, Committee Hansard, 22 February 2012, p. 50.

[25]      Mr Ian Silk, Chief Executive Officer, AustralianSuper, Committee Hansard, 22 February 2012, p. 63.

[26]      Mr Paul McBride, General Manager, Personal and Retirement Income Division, Department of the Treasury, Committee Hansard, 22 February 2012, p. 75.

[27]      CPA Australia, Submission 17, p. 1.

[28]      Financial Services Council, Submission 1, p. 3.

[29]      Mr Paul McBride, General Manager, Personal and Retirement Income Division, Department of the Treasury, Committee Hansard, 22 February 2012, p. 75.

[30]      Chamber of Commerce and Industry Queensland, Submission 4, p. 2.

[31]      The thresholds range from $550,000 in Victoria to $1.5 million in the ACT. Treasury, answer to question on notice, AET 34, Additional Estimates 2010–11, p. 2.

[32]      Mr Tim Lyons, Assistant Secretary, Australian Council of Trade Unions, Committee Hansard, 22 February 2012, p. 35.

[33]      Mr Peter Anderson, Chief Executive, Australian Chamber of Commerce and Industry, Committee Hansard, 22 February 2012, p. 42.

[34]      Mr Peter Anderson, Chief Executive, Australian Chamber of Commerce and Industry, Committee Hansard, 22 February 2012, p. 45.

[35]      Dr Cassandra Goldie, Chief Executive Officer, Australian Council of Social Service, Committee Hansard, 22 February 2012, p. 55.

[36]      Aged and Community Services Australia, Submission 7, pp. 1–2.

[37]      Catholic Health Australia, Submission 6, p. 2.

[38]      Mr Tim Lyons, Assistant Secretary, Australian Council of Trade Unions, Committee Hansard, 22 February 2012, p. 32.

[39]      Australian Chamber of Commerce and Industry, Submission 14, pp. 21–22.

[40]      Australian Council of Trade Unions, Submission 9, p. 14.

[41]      Australian Council of Trade Unions, Submission 9, p. 14.

[42]      Australian Manufacturing Workers Union, Submission 10, p. 1.

[43]      CPA Australia, Submission 17, pp. 2–3.

[44]      Mercer, Submission 13, p. 5.

[45]      Mercer, Submission 13, p. 6.

Chapter 8 - Using the benefits of the mining boom to assist small businesses

[1]        The Hon. Bill Shorten MP, Minister for Financial Services and Superannuation, Second Reading Speech, Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, House of Representatives Hansard, 2 November 2011, p. 12417.

[2]        The Hon. John Howard MP, Prime Minister, 'Promoting an Enterprise Culture', Media release, 26 September 2004.

[3]        Tax Laws Amendment (2004 Measures No. 7) Bill 2004, Explanatory Memorandum, p. 30.

[4]        Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol. 1, December 2009, p. 89.

[5]        Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol. 1, December 2009, p. 89.

[6]        Australian Taxation Office, 'Entrepreneurs tax offset' www.ato.gov.au/businesses/content.aspx?
menuid=0&doc=/content/00149627.htm&page=14&H14 (accessed 30 January 2012).

[7]        Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, Revised Explanatory Memorandum, p. 3.

[8]        The ITAA 1997 explains that 'broadly a pool is made up of the costs of the depreciating assets that are allocated to it or, in some cases, a proportion of those costs'. Income Tax Assessment Act 1997, s. 328-170.

[9]        The Hon. Bill Shorten MP, Minister for Financial Services and Superannuation, Second Reading Speech, Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, House of Representatives Hansard, 2 November 2011, p. 12417.

[10]      Australia's Future Tax System Review, Report to the Treasurer, part 2: detailed analysis, vol. 1, December 2009, p. 173.

[11]      Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, Revised Explanatory Memorandum, p. 4.

[12]      Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Bill 2011, Revised Explanatory Memorandum, p. 5.

[13]      National Farmers' Federation, Submission 19, p. 3.

Dissenting Report by Coalition Senators - Mining tax: a bad tax out of a bad process

[1]        Minerals Council of Australia, Submission 20, p. 24.

[2]        All figures taken from material tabled in the Senate by Senator Arbib on behalf of the Treasurer
on 9 February 2012 unless otherwise noted.

[3]        Originally announced in 2010-11 Budget Paper No 2, p. 44.  Updated forecasts from Explanatory Memorandum to Superannuation Guarantee (Administration Amendment) Bill 2011, p. 4.

[4]        Other costs include the Expert Scientific Committee, COAG funding, and other minor changes announced in MYEFO 2011-12.

[5]        Mid-Year Economics and Fiscal Outlook 2011-12, p. 364.

[6]        New South Wales Budget 2011-12,  Budget Paper No. 2, p. 5-2, 5-3 and Senate Economics Committee, Transcript of Inquiry into Minerals Resource Rent Tax Bill 2011, 21 February 2012, pp 65–66.

Minority report by the Australian Greens - Executive summary

[1]        Reserve Bank Governor Glenn Stevens gave an interesting example to illustrate this point: 'five years ago, a ship load of iron ore was worth about the same as about 2,200 flat screen television sets. Today it is worth about 22,000 flat-screen TV sets – partly due to TV prices falling but more due to the price of iron ore rising by a factor of six'; Reserve Bank Bulletin, December 2010, p. 70.

[2]        Reserve Bank of Australia, 'The level and distribution of recent mining sector revenue', Reserve Bank Bulletin, January 2009, p. 11.

[3]        Reserve Bank of Australia, Statement on Monetary Policy, November 2011, p. 43. A study commissioned by the Greens estimated the proportion at 83 per cent; Naomi Edwards, 'Foreign ownership of Australian mining profits', 2011. An Australia Institute study estimated the proportion as around 75 per cent; David Richardson and Richard Denniss, Mining the Truth, Australia Institute, September 2011, p. 23.

[4]        Many of these workers apparently do not value their jobs in mining that highly. The mining industry loses around a quarter of its workforce each year, 'suggesting that even the high wages paid are not sufficient to compensate many workers for the risks, social isolation and other negative features often associated with the work'; David Richardson and Richard Denniss, Mining the Truth, Australia Institute, September 2011, p. 23.

[5]        Ken Henry, 'Revisiting the policy requirements of the terms-of-trade boom', Economic Roundup, Issue 2, 2008, p. 45; Glenn Stevens, 'Economic conditions and prospects', Reserve Bank Bulletin, September quarter 2011, p. 87.

[6]        David Richardson and Richard Denniss, Mining the Truth, Australia Institute, September 2011, p. 56.

[7]        The term 'Dutch disease' was coined by The Economist, 26 November 1977. The economic literature on this matter has featured key contributions by two eminent Australian economists: Max Corden and Bob Gregory. In Australia, the 'Dutch disease' is sometimes referred to as the 'Gregory effect'.  Key articles include Max Corden and Peter Neary, 'Booming Sector and De‑industrialisation in a Small Open Economy', The Economic Journal, December 1982, and Bob Gregory, 'Some Implications of the Growth of the Mineral Sector', The Australian Journal of Agricultural Economics, 1976.

[8]        On many occasions when the Reserve Bank increased interest rates between 2006 and 2008 their published statements cited commodity prices as a factor behind the rise; David Richardson and Richard Denniss, Mining the Truth, Australia Institute, September 2011, p. 48. The higher interest rates also added to pressures on the dollar to appreciate.

[9]        Mr Jeff Lawrence, Secretary, Australian Council of Trade Unions, Proof Committee Hansard, 22 February 2012, p. 7.

[10]      Professor John Quiggin, Proof Committee Hansard, 22 February 2012, p. 7.

[11]      Mr John McKillop, National Farmers' Federation, Proof Committee Hansard, 22 February 2012, p. 49.

[12]      David Richardson and Richard Denniss, Mining the Truth, Australia Institute, September 2011, p. 27.

[13]      David Richardson and Richard Denniss, Mining the Truth, Australia Institute, September 2011, pp 54-55.

[14]      Mr Mitch Hooke, Chief Executive Officer, Minerals Council of Australia, Proof Committee Hansard, 21 February 2012, p. 34.

[15]      Dr David Gruen, Executive Director (Macroeconomic Group), Department of the Treasury, Economics Estimates Hansard, 16 February 2012, p. 17.

[16]      Dr David Day, 'Miners might not dig a coal delay, but it makes sense', Sydney Morning Herald, 8 March 2012.

[17]      Professor John Quiggin, Proof Committee Hansard, 22 February 2012, p. 1.

[18]      This not true of all large mining companies. Fortescue Metals Group did not pay any company tax until December 2011; Mr Marcus Hughes, Head of Tax, Fortescue Metals Group, House Economics Committee Hansard, 9 November 2011, p. 6.

[19]      Dr Martin Parkinson, 'Introductory remarks to Australia-Israel Chamber of Commerce', Sydney, 7 March 2012, p. 9.

[20]      Dr Ken Henry, Senate Select Committee on the Scrutiny of New Taxes Hansard, 22 November 2010, p. 39.

[21]      Peter Greagg, Parham and Stojanovsk, 'Disparities in average rates of company tax across industries', Economic Roundup, Winter 2010; and John Clark, Peter Greagg and Amy Leaver, 'Average rates of company tax across industries revisited', Economic Roundup, 2011, Issue 2.

[22]      Mr David Flanagan, Managing Director, Atlas Iron Ltd, Proof Committee Hansard, 22 February 2012, p. 8.

[23]      Dr Alan Moran, Institute of Public Affairs, Proof Committee Hansard, 21 February 2012, p. 13. Fortescue Metals Group refers to 'alleged economic rents'; Submission 26, p. 1.

[24]      For examples, see Chamber of Minerals & Energy of Western Australia, Submission 2, p. 4.

[25]      Australian Bureau of Statistics, Private New Capital Expenditure and Expected Expenditure (5625.0), December quarter 2011.

[26]      Mr Peter Colley, National Research Director, Construction, Forestry, Mining and Energy Union Proof Committee Hansard, 22 February 2012, p. 33.

[27]      The Economist, 11 February 2012, p. 45; provided as additional information 4.

[28]      Mr David Richardson, Australia Institute, additional information 11; The Economist, 11 February 2012, pp 45–46.

[29]      Fortescue Metals Group, Submission 26, p. 5.

[30]      Professor John Quiggin, Proof Committee Hansard, 22 February 2012, pp 1–2 and 7.

[31]      For example, Dr Alan Moran, Institute of Public Affairs, Proof Committee Hansard, 21 February 2012, p. 14.

[32]      Internationally regarded expert on mining taxes Professor Ross Garnaut, Senate Select Committee on the Scrutiny of New Taxes Hansard, 19 November 2010, p. 26.

[33]      Professor John Quiggin, Proof Committee Hansard, 22 February 2012, p. 1.

[34]      See, for example, Senator Bob Brown, 'A tax on resources profits would benefit all of us', Sydney Morning Herald, 6 April 2010. 

[35]      Mr Mitch Hooke, Minerals Council of Australia, Proof Committee Hansard, 21 February 2012, p. 30.

[36]      Professor Henry Ergas, Proof Committee Hansard, 21 February 2012, pp 4 and 9.

[37]      Dr Alan Moran, Institute of Public Affairs, Proof Committee Hansard, 21 February 2012, p. 17.

[38]      Professor John Quiggin, Proof Committee Hansard, 22 February 2012, p. 2.

[39]      This was not made clear at the time, leading to surprise about how little the apparent drop in revenue was between the RSPT and MRRT in the first two years. Interviewed on Lateline on 14 July, Treasurer Swan conceded that higher commodity prices had increased the revenue over the first two years by $6 billion.

[40]      Naomi Edwards, 'An analysis of the impact of switching from the RSPT to the MRRT', 28 March 2011.

[41]      John Kehoe, 'Mining tax hole tops $100bn', Australian Financial Review, 24 February 2011.

[42]      In responding to a question after his speech, the Treasurer said 'this nonsense argument that all of this revenue was lost by the change of the design from the RSPT to the MRRT, it is simply rubbish. It is based on 10-year projections which are unreliable. It is based on a whole set of assumptions'; 5 March 2012.

[43]      Treasury response to questions on notice from supplementary budget estimates, October 2011, no. 668.

[44]      For example, scepticism about revenue projections is expressed by BDO accountants, Submission 3.

[45]      MRRT Explanatory Memorandum, pp 61–62.

[46]      Mr Rob Heferen, Executive Director (Revenue Group), Department of the Treasury,
Proof Committee Hansard, 22 February 2012, p. 67.

[47]      Professor John Quiggin, Proof Committee Hansard, 22 February 2012, pp 3–4.

[48]      Mercer, Submission 13, p. 2.

[49]      Australian Chamber of Commerce and Industry, Submission 14, pp 10–11.

[50]      http://www.treasury.gov.au/documents/1956/PDF/Information_briefing_national_savings.pdf

[51]      Professor Henry Ergas, Proof Committee Hansard, 21 February 2012, p. 11. This point was also made in article Professor Ergas wrote with Mark Harrison and Jonathan Pincus, 'Some economics of mining taxation', Economic Papers, December 2010.

[52]      Australia's Future Tax System, December 2009, recommendation 45, p. 231.

[53]      Dr Alan Moran, Institute of Public Affairs, Proof Committee Hansard, 21 February 2012, p. 15.

[54]      OECD, Economic Surveys: Australia, November 2010.

[55]      Professor Garnaut, Senate Select Committee on the Scrutiny of New Taxes Hansard,
19 November 2010, p. 34.

[56]      In the early years at least the revenue raised will predominantly come from iron ore; Senate Select Committee on the Scrutiny of New Taxes, The Mining Tax: a Bad Tax out of a Flawed Process, June 2011, pp 70–71; based on Treasury, spreadsheet released under Freedom of Information, 14 February 2011.

[57]      Treasury, response to question on notice no. 667 from supplementary budget estimates,
October 2011.

[58]      OECD, Economic Surveys: Australia, November 2010.

[59]      Professor Ross Garnaut, Senate Select Committee on Scrutiny of New Taxes Hansard, 19 November 2010, pp 30–31.

[60]      Mr David Richardson, Australia Institute, Proof Committee Hansard, 21 February 2012, p. 26.

[61]      Professor Henry Ergas, Proof Committee Hansard, 21 February 2012, p. 3.

[62]      Dr Alan Moran, Institute of Public Affairs, Proof Committee Hansard, 21 February 2012, p. 15.

[63]      Mr Peter Colley, National Research Director, Construction, Forestry, Mining and Energy Union, Proof Committee Hansard, 21 February 2012, p. 32.

[64]      Naomi Edwards, 'Golden Daze: estimated revenue impact from extending MRRT to gold', 11 August 2011. The author conservatively assumed the gold price would ease back from US$1,600 per ounce in 2011 to $1,450 in 2016. The latest forecast from the Bureau of Resources and Energy Economics is that the gold price will average US$1,850 in 2012; Resources and Energy Quarterly, December quarter 2011, p. 47.

[65]      Mr Mitch Hooke, Chief Executive Officer, Minerals Council of Australia, Proof Committee Hansard, 21 February 2012, p. 32.

[66]      Mr Mitch Hooke, Chief Executive Officer, Minerals Council of Australia, Proof Committee Hansard, 21 February 2012, p. 32.

[67]      Mr Mitch Hooke, Chief Executive Officer, Minerals Council of Australia, Proof Committee Hansard, 21 February 2012, p. 32.

[68]      Minerals Council of Australia, Submission 20.

[69]      KPMG, 'Potential financial impacts of the Resource Super Profits Tax on new mining projects in Australia', June 2010.

[70]      Mr Patrick Sedgley, Manager, Resource Tax Unit, Department of the Treasury, House Economics Committee Hansard, 8 November 2011, p. 9. Fortescue Metals Group make a similar point; Submission 26, p. 8.

[71]      Australia's Future Tax System, December 2009, p. 240.

[72]      The Resources Super Profits Tax, 2010, p. 31.

[73]      Dr Hen Henry, Secretary, Department of the Treasury, Senate Committee on the Scrutiny of New Taxes Hansard, 22 November 2010, pp 9 and 12.

[74]      OECD, Economic Surveys: Australia, November 2010.

[75]      Professor Henry Ergas, Proof Committee Hansard, 21 February 2012, p. 3.

[76]      Australian Government, GST Distribution Review, Terms of Reference, www.gstdistributionreview.gov.au/content/Content.aspx?doc=tor.htm. See the discussion in the majority report and also in the Australian Financial Review, 9 January 2012.

[77]      Australia's Future Tax System, December 2009, p. 234.

[78]      Professor George Fane, Senate Select Committee on the Scrutiny of New Taxes Hansard,
30 March 2011, p. 26.

[79]      Construction, Forestry, Mining & Energy Union, Submission 16, pp 4–5.

[80]      BDO Accountants, Submission 3, pp 4–5, make this point. Fortescue Metals Group, Submission 26, make a similar argument.

[81]      Mr Tapp, Fortescue Metals Group, Proof Committee Hansard, 21 February 2012, p. 45.
A similar point was made by Mr John Murray, Director, BDO Accountants, Proof Committee Hansard, 21 February 2012, p. 47.

[82]      The comment comes from two professors of accounting, Professor Peter Carey and Professor Neil Fargher, The Age, 16 February 2012.

[83]      Mr Hughes, Fortescue Metals Group, Proof Committee Hansard, 21 February 2012, p. 42.

[84]      Mr Rob Heferen, Executive Director (Revenue Group), Department of the Treasury,
Proof Committee Hansard, 21 February 2012, p. 71.

[85]      Mr Rob Heferen, Treasury, Proof Committee Hansard, 21 February 2012, p. 64.

[86]      Mr John Murray, Director, BDO Accountants, Proof Committee Hansard, 21 February 2012, p. 47.

[87]      Mr Simon Bennison, Chief Executive Officer, AMEC, Proof Committee Hansard, 21 February 2012, p. 55.

[88]      Mr David Flanagan, Managing Director, Atlas Iron Ltd, Proof Committee Hansard, 22 February 2012, pp 8 and 11.

[89]      Construction, Forestry, Mining & Energy Union, Submission 16, p. 12.

[90]      Mr David Richardson, Chief Financial Officer, Gindalbie Metals, Proof Committee Hansard, 21 February 2012, p. 56.

[91]      Construction, Forestry, Mining & Energy Union, Submission 16, p. 9.

[92]      Uniting Justice Australia, Submission 28, p. 5.

[93]      Professor Henry Ergas, Proof Committee Hansard, 21 February 2012, p. 10.

[94]      Fortescue Metals Group Ltd, Submission 26, p. 9. See also comments from Mr Tapp, Fortescue Metals Group, Proof Committee Hansard, 21 February 2012, pp 40–42 and 44–45.

[95]      It notes that the Policy Transition Group recommended a review 'within five years'.

[96]      Construction, Forestry, Mining & Energy Union, Submission 16, pp 2, 8.

[97]      Professor John Quiggin, Proof Committee Hansard, 22 February 2012, p. 5.

[98]      Professor John Quiggin, Proof Committee Hansard, 22 February 2012, p. 6.

[99]      Mr John McKillop, Chair of Economics Committee, National Farmers' Federation,
Proof Committee Hansard, 22 February 2012, p. 48.

[100]    Mr Peter Anderson, Chief Executive, Australian Chamber of Commerce and Industry,
Proof Committee Hansard, 22 February 2012, pp 42–43.

[101]    Australia's Future Tax System, December 2009, recommendations 29 and 30, pp 173–174.

[102]    Professor Henry Ergas, Proof Committee Hansard, 21 February 2012, p. 12.

[103]    Professor Henry Ergas, Proof Committee Hansard, 21 February 2012, p. 12.

[104]    The net cost to revenue will be less as under dividend imputation there will be more personal income tax paid on dividends.

[105]    Naomi Edwards, 'An analysis of the proposed reduction in company tax rates in Australia', March 2011.

[106]    Treasurer, 'Documents for Senate Order Relating to the Mineral Resources Rent Tax', 8 February 2012.

[107]    The Parliamentary Library estimated the cost as $17 billion; Senate Select Committee on the Scrutiny of New Taxes, The Mining Tax: a Bad Tax out of a Flawed Process, June 2011, p. 112.

[108]    Australian Council of Trade Unions, Submission 9, p. 13.

[109]    Financial Services Council, Submission 1, p. 1.

[110]    Association of Superannuation Funds of Australia, Submission 21, p. 2.

[111]    Australian Super, Submission 5, p 2. The example assumes someone working from age 20 to 65, earning $40,000 a year with inflation of 4 per cent and investment return of 7 per cent.

[112]    For example, John Roskam of the Institute of Public Affairs, 'Slay the Super sacred cow', Australian Financial Review, 12 January 2012.

[113]    Chamber of Commerce and Industry Queensland, Submission 4, p. 10.

[114]    Association of Superannuation Funds of Australia, Submission 21, pp 6-7.

[115]    See for example Australian Chamber of Commerce and Industry, Submission 14, p. 7 and Business SA, Submission 8, p. 1.

[116]    Mr Paul McBride, General Manager, Personal and Retirement Income Division, Department of the Treasury, Proof Committee Hansard, 22 February 2012, p. 74.

[117]    Mr Peter Davidson, Senior Policy Officer, Australian Council of Social Service,
Proof Committee Hansard, 22 February 2012, p. 56.

[118]    Ms Pauline Vamos, Chief Executive Officer, Association of Superannuation Funds of Australia, Proof Committee Hansard, 22 February 2012, p. 66.

[119]    Among those expressing this view are Mr Peter Anderson, Chief Executive, Australian Chamber of Commerce and Industry, Proof Committee Hansard, 22 February 2012, p. 44. The Institute of Public Affairs is uncharacteristically more cautious, saying only that the SG 'is likely to flow onto employees in the form of lower wages'; Submission 12, p. 27. The National Farmers' Federation said that any increase in labour costs caused by the SG increase would be 'insignificant compared to the skills shortage that we are currently facing'; Mr John McKillop, NFF, Proof Committee Hansard, 22 February 2012, p. 48.

[120]    Mr Tim Lyons, Assistant Secretary, Australian Council of Trade Unions, Proof Committee Hansard, 22 February 2012, p. 35.

[121]    Mr Tim Lyons, ACTU, Proof Committee Hansard, 22 February 2012, p. 35.

[122]    In addition to the natural increase that will occur if the SG remains at 9 per cent. Financial Services Council, Submission 1, p. 4.

[123]    Speech by Prime Minister Gillard to Financial Services Council breakfast, 31 August 2011.

[124]    Treasury, Tax Expenditures 2011, p. 4. The main components are the concessional taxation of employer contributions and superannuation entity earnings. As ACOSS points out, this is about the same as the cost of the age pension; Submission 18, p. 7. The concessions are projected to increase to $42 billion by 2014-15.

[125]    ACOSS, 'A fairer, more efficient tax and social security system', September 2011, and Submission 18, p. 9. The latter also remarks that 'the top 20 per cent of income earners receive more in tax concessions over their lifetimes than they would have received if paid the maximum rate of age pension'.

[126]    Association of Superannuation Funds of Australia, Answers to questions on notice, p. 2.

[127]    By comparison, someone saving in a bank deposit makes the deposit out of income taxed at their full marginal income tax rate, the bank pays company tax and the interest paid is taxable at their full marginal income tax rate.

[128]    That is, the concessions are regressive. Mercer argues that including both the aged pension and tax concessions for superannuation, 'the total Government support for retirement incomes...is remarkably consistent across a range of lifetime income levels'; Submission 13, p. 2.

[129]    Australian Council of Trade Unions, Submission 9, p. 14.

[130]    For example, Anglicare in their submission to the Tax Forum.

[131]    Australia's Future Tax  System, December 2009, p. 100.

[132]    ACOSS, Submission 18, p. 18.

[133]    As well as earning less than $37,000 eligible individuals need to have received more than 10 per cent of income from business or employment. As Mercer, Submission 13, p. 6, point out, different definitions of income are used for the two tests, an unnecessary complexity.

[134]    This is criticised by Mercer, Submission 13, p. 5. They give the example that 'once the SG reaches 12%, a Government contribution of $666 would be required to offset the contribution tax on SG contributions for a person earning $37,000 (15% x 12% x $37,000 = $666)'. CPA Australia suggest linking the maximum LISC payment to the upper threshold of the 15 per cent marginal tax bracket; Submission 17, p 3. A similar proposal is made by the Australian Institute of Superannuation Trustees, Submission 22, p. 14.

[135]    This is criticised by Mercer, Submission 13, p. 6.

[136]    CPA Australia argue it is therefore a more significant reform in the short term; Submission 17, p. 2.

[137]    Australian Council of Social Service, Submission 18, p. 5.

[138]    Australian Council of Social Service, Submission 18, p. 12.

[139]    Mr Ian Silk, Chief Executive, Australian Super, and Ms Pauline Vamos, Chief Executive Officer, Association of Superannuation Funds of Australia, raise this concern; Proof Committee Hansard, 22 February 2012, pp 65 and 70.