Australians Should Get Rents for Ores
Australians are routinely being told that hefty mining taxes would hinder the country’s exports of coal and iron ore. However, mining giant BHP Billiton recently increased its profits by 83% to US $8.1bn. In spite of this enormous growth, the company only paid US $29m in minerals resource rent tax (MRRT). As it stands, the tax is in no way making BHP uncompetitive.
Unlike Australia, Norway has kept their resource extraction “rents”. Norway has a 78% tax on oil and gas revenues – unlike Australia, where the effective tax rate is a mere 13%. $60bn from gas sales to continental Europe is annually deposited in the Norwegian sovereign wealth fund. The fund has 5.11 trillion Krone (AU$930bn), or twice Norway’s GDP.
Norway’s example demonstrates that, after 20 years, private companies will remain and continue to make a profit – with margins reduced.
But while Norway has been prudent with its resource bounty of $185,000 for every citizen, Australia has not.
It is not xenophobic to believe that Australians should receive the maximum benefit from their property. Australia’s mineral wealth is owned by the Crown; the Crown holds those resources in trust so they may benefit citizens. Those resources ought to be exploited by the Australian citizenry because they belong to them.
Ed. Notes: It’s not just exhaustible natural resources that should enrich the populace but the more familiar surface land, too. Have owners pay in Land Dues and have everyone (owners included) receive rent dividends. Doing so is not only fair. It also makes taxes and subsidies far less excusable. And it — geonomics — has worked wherever tried.