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2010-11-26

Mining tax rights and the Australian federation

Comments on Dennis Shanahan “Facing a new mining war”, http://www.theaustralian.com.au/news/opinion/facing-a-new-mining-war/comments-e6frg6zo-1225961149433
There are bigger issues involved in the MRRT. The first one is in the current federation who do resources belong to constitutionally, the states or the federal?

The second issue is should the states have the right to tax the rent of those resources, what can/should the federal do in terms of resources rent taxes? Should that simply grab the tax revenue, or should it respect the states' rights and work with the states to make the royalties or resources rent tax more efficient.

Third, how should the royalties/tax of resources be distributed between the states and the Commonwealth if any should be given to the latter, and how should that tax be used or be kept for future generations?

Fourthly, are the constant threats by the federal government to the states productive and conducive to cooperative federation and to the wellbeing of all Australians? There should be a clearer definition what the Commonwealth can and cannot do in terms of federal relations.

It is a myth to believe that Canberra can do better than the state governments in terms of servicing the people, no matter how poor state governments have shown in some areas.

Just ask the question: if all state governments from all the major political parties cannot do a service well, how can a government of any political persuasion from Canberra can do it better?

The fundamental issues of poor state government services may lie in the poor resources and unclear responsibilities of revenue and services between the two levels of government in Australia. Unless those issues are resolved, any faith on federal government for better services is likely to be badly misplaced.

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