Repeal of the Minerals Resource Rent Tax
JOINT MEDIA RELEASE
Senator the Hon. Mathias Cormann
Minister for Finance
Hon. J. B. Hockey
Treasurer
The Government committed to repeal the Minerals Resource Rent Tax (mining tax) and its associated spending measures in an entirely transparent manner at both the 2010 and 2013 Federal Elections.
When announced by Labor, the mining tax was supposed to raise $12 billion over its first two years of operation, instead it has raised closer to $300 million – or around 3% of what was promised, with most of it progressively refunded to mining tax payers.
Fewer than 20 taxpayers contributed to the meagre revenue raised, but over 125 other miners are complying with the mining tax legislation, while not actually paying any tax. The tax has already cost the ATO over $50 million to administer.
The former Labor Government locked in over $17 billion of expenditure over the current forward estimates (including 2017-18) against the non-existent proceeds of this failed tax.
The Government cannot afford to keep borrowing money to pay for this kind of unfunded spending.
Labor voted to keep every dollar of unfunded spending linked to the mining tax, and then voted to keep the failed tax.
Labor should immediately outline how it will fund all of the spending linked to the mining tax.
The Government will not accept amendments which support these unfunded spending measures remaining in place.
By voting to keep many of the associated spending measures, Senators have effectively voted to keep the mining tax.
Updated costings for the repeal of the mining tax and all its associated measures over the current forward estimates have been provided below.
Estimated underlying cash impacts
| Schedule within Bill | Measure | 2014‑15 $m | 2015‑16 $m | 2016‑17 $m | 2017‑18 $m | Total $m |
|---|---|---|---|---|---|---|
| Schedule 2 | Discontinuing company loss carry‑back | 350 | 300 | 300 | 350 | 1,300 |
| Schedule 3 | Reduction of instant asset write‑off threshold from $5,000 to $1,0001 | 500 | 900 | 900 | 900 | 3,200 |
| Schedule 4 | Discontinuing vehicle accelerated depreciation | 100 | 200 | 150 | 100 | 550 |
| Schedule 5 | Amending geothermal exploration treatment | ‒ | 5 | 5 | 5 | 15 |
| Schedule 6 | Re-phasing the Superannuation Guarantee increase2 | 170 | 565 | 845 | 930 | 2,510 |
| Schedule 7 | Abolishing the low income superannuation contribution | 836 | 941 | 923 | 915 | 3,615 |
| Schedule 8 | Abolishing the income support bonus | 324 | 314 | 316 | 324 | 1,278 |
| Schedule 9 | Abolishing the Schoolkids Bonus | 655 | 1,322 | 1,342 | 1,376 | 4,695 |
| Total Expenditure repealed | 2,935 | 4,547 | 4,781 | 4,900 | 17,163 | |
Since 1 July 2012 the Minerals Resource Rent Tax has raised $340 million on a net basis, with forecast revenue routinely written down each Budget update.
| MRRT Revenue Estimates History | 2012‑13 $b | 2013‑14 $b | 2014‑15 $b | 2015‑16 $b | 2016‑17 $b | Total $b |
|---|---|---|---|---|---|---|
| RSPT Estimate | 3.0 | 9.0 | 12.5 | 12.5 | 12.5 | 49.5 |
| Original MRRT Estimate (July 2010) | 4.0 | 6.5 | 6.5 | 5.5 | 4.0 | 26.5 |
| PEFO 2010 | 4.0 | 6.5 | 6.5 | 5.5 | 4.0 | 26.5 |
| MYEFO 2010-11 | 3.3 | 4.1 | N/A | N/A | N/A | 7.4 |
| Budget 2011-12 | 3.7 | 4.0 | 3.4 | N/A | N/A | 11.1 |
| MYEFO 2011-12 | 3.7 | 3.8 | 3.1 | N/A | N/A | 10.6 |
| Budget 2012-13 | 3.0 | 3.5 | 3.2 | 3.7 | N/A | 13.4 |
| MYEFO 2012-13 | 2.0 | 2.4 | 2.1 | 2.6 | N/A | 9.1 |
| Budget 2013-14 | 0.2 | 0.7 | 1 | 1.4 | 2.2 | 5.5 |
| Economic Statement 2013 | 0.2 | 0.6 | 0.7 | 1.0 | 1.7 | 4.2 |
| PEFO 2013 | 0.2 | 0.7 | 0.8 | 1.1 | 1.8 | 4.6 |
| MYEFO 2013-14 | 0.2 | 0.3 | 0.2 | N/A | N/A | 0.7 |
| Budget 2014-15 | 0.2 | 0.1 | - | N/A | N/A | 0.3 |
Treasurer - Gemma Daley - 0418 148821
Minister Cormann - Karen Wu - 0428 350139
[1] The reduction in thresholds for the instant asset write-off is dealt with entirely in the mining tax repeal legislation. The increase in the instant asset write-off threshold from $5,000 to $6,500 was funded by revenue from the carbon tax, whilst the increase in the instant asset write-off threshold from $1,000 to $5,000 was funded by anticipated revenue from the mining tax. Total savings from the carbon tax component from reducing the instant asset write-off from $6,500 to $5,000 are nil in 2014-15, $150 million in 2016-17, and $100 million in 2017-18.
[2] This measure does not include the Government’s 2014-15 Budget announcement.