MRRT should be given to the states

Comments on Rob Burgess “Gillard's risky MRRT splurge”, 14/02/2011, http://www.businessspectator.com.au/bs.nsf/Article/Julia-Gillard-politics-government-MRRT-mining-heal-pd20110214-E2RW6?OpenDocument&src=sph

Maybe a compromise for the use of the mining tax inclusive of state mining royalties is that a proportion of the total revenue be spent on current expenditure and the rest being put into a future fund.

It is difficult for the current governments to put aside all the mining revenue for future use.

But it is also prudent and indeed a must to have this resource rent that is depleted for the use of future generations.

Hence the compromise comes.

However, the federal government got it wrong in the first place in terms of the RSPT and MRRT - it simply is grabbing the revenue from the states and use it for its own purpose, as opposed to propose to put it aside for the future.

It shouldn’t have done that way.

On the one hand, it pressures the states by saying that their future revenue is not enough to foot the health bills, on the other hand it chokes the states off one of their very important own revenue source, that is, mining royalty in the guise of RSPT or MRRT.

Strictly speaking it is not a reform for the benefit of the nation, but a revenue grab by the federal government!

Can you have poorer government than that?