The International Monetary Fund (IMF) is throwing its support behind the federal government's proposed mining tax as its deputy head for tax policy Philip Daniel declared in a Sydney conference today that the measure is a worthwhile reform for the Australian economy.

Mr Daniel said that the resource super profits tax (RSPT) could also be adopted by other countries owing to the many benefits that it carries, and the IMF welcomes the tax in principle as "it shifts the whole Australian resource tax system strongly in the direction of neutrality."

The IMF believed that the mining tax would not hurt Australia's economy but rather it "offers strengthening of Australian public finances over the long term, reduces risk of absolute loss for investors, while leaving a substantial share of resource profits in private hands."

Mr Daniel said that the mining industry's contention that the tax would erode the country's competitiveness is exaggerated as he added no signs were seen so far that the proposal would bring negative effects on Australia's economic prospects.

Instead he stressed that consensus projections are leading to positive outlook for Australia as he cited that the country has even experience encouraging business investments in recent months.

On the other hand, Ben Smith of the Australian National University is doubtful that the RSPT could actually raise the amount of money that the federal government is anticipating, though he admitted that the retrospective application of the tax to existing projects would amass strong revenues but only in the short-term.

Mr Smith said that it is likely that the government would indeed earn the 40 percent expected from the returns of mining company but its long term guarantee is questionable at this time.

He said that chances of a negative return could still happen though very unlikely, but "there are risks associated with it and the government really needs to spend the revenue taking into account of these long-term factors."