The Resource Super Profits Tax will now be known as the Minerals Resource Rent Tax, in a compromise between Julia Gillard’s Federal Government and the miners.
The Minerals Resource Rent Tax, as it is now called will tax miners at 30 percent instead of the planned 40 percent under Kevin Rudd’s proposed RSPT. The relabeling of the RSPT to the MRRT shows Julia Gillard wishes to totally disassociate herself from Kevin Rudd’s failed push for the tax. Rebranding the tax is a transparent attempt to decouple the Labor party from the negative sentiment around the RSPT.
Ms Gillard detailed the plans at a press conference in Canberra this morning.
“There will be a negotiated profit based tax regime but there will be NO resource super profits tax.” Said Ms Gillard according to political reporter Latika Bourke.
Ms Gillard was glad that the deadlock in negotiations had been overcome, “Today we are moving forward together” Ms Gillard said.
Justifying the name change, the Minerals Resource Rent Tax will only apply to iron ore and coal and not other resources, not other mineral resources at this stage as a result it will only effect around 320 mining companies, not the 2,500 previously. The existing petroleum resource rent tax being extended to cover all oil and gas projects both offshore and onshore projects at the existing rate of 40 percent.
Compromising on point at which the MRRT comes into effect on profits, it will now be the long term bond rate (currently about 5 percent) plus 7 percent. As a result of the changes to the proposed RSPT, the MRRT will bring in $1.5 billion less revenue, forcing the government to cut back the proposed cut in Company Tax rates from 28 percent to 29 percent from the current 30 percent.