WA Premier Barnett says new tax deal could face legal questions
Debates on the revised mining tax could be far from over as Western Australia Premier Colin Barnett said over the weekend that the new identity of the proposed tax could face some legal challenges as it now appeared to be levied on mineral resources instead on corporate profits.
Mr Barnett told ABC that the constitution ensures that mineral resources belong solely to the host state and since the proposed mining tax has been revised as a mining resource rent tax and targeted to tax the resource at the mine gate, "it immediately raises the questions whether this would be constitutionally valid and it's highly likely that there will be a challenge at some stage."
He said that the new proposed tax is uncertain at this time and the only certain is many sectors would feel its repercussions, from the state government down to the smaller mining companies or even banks, investors and superannuation funds.
And as Mr Barnett raises his questions, Prime Minister Julia Gillard prepared to hit the road and promote her government's new tax deal, visiting first the Mackay resources hub in Queensland with Deputy Prime Minister Wayne Swan and Resources Minister Martin Ferguson.
For his part, Small Business Minister Craig Emerson is upbeat that the deal obtained by the government would raise up the confidence level in Queensland as under the new tax, which will be levied only to coal and iron ore, "contractors that supply the mining projects in Queensland will feel reassured."
However, opposition finance spokesman Andrew Robb is doubtful that the government could actually deliver their promised benefits such as infrastructure funding when it had decided to reduced the tax's headline rate to 30 percent, considerably losing some substantial amount of projected revenues.
While the Gillard government is adamant that their estimated figures were still sizeable and should not affect proposed projects to be funded by the new tax's revenues, Mr Robb maintained that the whole exercise and estimates are ludicrous and "it is all smoke and mirrors at this time."