Wednesday, May 19, 2010

Henry to Indigenous Australians - some of this should be for you

Aboriginal Australians would have a special claim over the money raised by the proposed Resource Super Profits Tax if the head of the Treasury had his way.

Dr Ken Henry endorsed the idea while selling the tax at the annual post-budget economists briefing in Sydney.

Asked whether the revenue from the tax should really flow to the original people of Australia he replied that Australia's natural resources belonged to all Australians "including people not yet born".

"I don't want to get into a debate over whether the first settlers have a stronger claim than those who are second settlers or in my case those of sixth or seventh generation European extraction," he said.

"But if your question is, is there a case for some amount at least of that income, that revenue going to support Indigenous development, I would say very firmly yes, absolutely yes"...

Dr Henry's idea is not government policy but was yesterday given a cautious welcome by Indigenous Affairs Minister Jenny Macklin who said the proposed tax would boost mining and as result benefit Indigenous communities as native title holders.

Dr Henry told the economists Australia had an abundance of natural resources and should not "undercharge" for them.

What was proposed was a "tax reform" rather than a tax increase and would represent world’s best practice in charging for the exploitation of non-renewable natural resources.

Shortly before he spoke India's Mines Minister announced plans for a windfall tax on iron ore to apply "where prices are substantially higher than the cost of production".

India is the third biggest exporter of iron ore after Brazil and Australia.

Dr Henry said the existing state-based royalties to be replaced by the Super Profits Tax were amongst the most highly distorting taxes his panel discovered in its review of Australia's 125 taxes.

Many of the companies which have consulted with Treasury in the last two weeks "have come in equipped with all of their numbers project by project and very good discussions have place".

"I would have to say as well that in other cases the consultations have been less productive," he told the economists.

"Those who have come to the table have not brought their numbers with them and instead have come along armed with rhetoric."

Dr Henry signaled there would be no compromise on one of the key elements of the plan - the rate of return taken at which the tax cut in.

It was not so much a tax as a joint venture with the Australian government a "silent partner" stumping up 40 per cent of a costs and taking 40 per cent of the excess profits.

Published in today's SMH and Age 

Related Posts

. Henry to miners: no compromise on where the tax kicks in

. This Resource Super Profits Tax... how will it work?

. So this idea of a super tax on mining profits... who raised it with the Henry Review?

. We'll still be mining