Intierra is on record as saying that the mining tax may raise $A8 billion less than what was first quoted by Gillard and Swan.
We say quoted, because as the Issues Paper highlights, there is a lot to be resolved before any speaker, including Swan and Treasury, can say with certainty what the tax will raise.
The paper is helpful about everything except the boundaries by which a tax can be established.
At best, it is guidance and its worst aspects tell the reader that government knows little about mining, less about mining finance and even less about the ingenuity needed to make ore economic and extract it.
The paper tries to establish the basis of the tax and the parameters of the tax through a series of questions which, in fairness, it tries to answer. Some questions are:
- What is coal? What is iron ore? What can and cannot be included in these definitions? Coal technologies get a special mention.
- What is a project for the purposes of the tax? When does it begin and end?
- What is the taxing point? How do you calculate value at the taxing point
- What is revenue at the taxing point? What are deductible expenses?
- Can projects be aggregated? The answer is yes, but what can and can’t you aggregate? And when?
- What does the $50 million threshold mean? Probably the company’s resource profits at the taxing point of the company’s project(s) but how do you deal with losses? And transitions?
- How do you determine your basis of valuation to calculate MRRT thresholds and how to transition them? Account for disposals?