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2010-06-25

From RSPT to a sensible RRT

Comments on Dennis Shanahan “PM hits gold with her mining tax stance”, 25/06/2010, http://www.theaustralian.com.au/news/opinion/pm-hits-gold-with-her-mining-tax-stance/story-e6frg6zo-1225884022129
I think Gillard is right in being open to negotiation with miners and not being bonded to the $12 billion revenue from the proposed RSPT.

The most sensible strategy for Gillard is to preserve a nominal RSPT and achieve a real outcome that will be seen by both miners and the public as a fair deal and a tax reform.

I would argue that a deal with miner along the line of PRRT taking into account of existing state royalties and exempt existing mining production if minerals price is not higher than current levels, possible in terms relative some measure. If the minerals price goes further higher, then tax only that part of the existing production.

That will be simple and fair to both miners and the public.

Forget that proposed revenue and rebalance the budget using other means. If surplus cannot be achieved as budgeted, then delay for a year to achieve that. Making a sensible retreat will not be seen as a broken promise because of changed circumstances as the RSPT is modified and real progress made under her leadership.

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