From the AFR:
The federal government should limit the refunds miners can claim for state royalties under the mining tax and cut the threshold at which the GST kicks in on imported goods to $500, a wide-ranging review of the GST recommends.
The review, which provides 50 recommendations as the government battles to fund major reforms amid rising costs and an ageing population, predicts growth in GST revenue will fall to 5.2 per cent from its average of 6 per cent since it was introduced 12 years ago.
It recommends the Government look at serious tax reform to reduce the number of inefficient state taxes and focus on the efficient ones.
From BS:
“This would reduce, but not remove, individual states’ incentives to increase their mineral royalties, while also potentially providing a windfall to other states,” the report said.
However, the trio called on Prime Minister Julia Gillard to engage in talks with the states to reach an agreement on resource taxes.
If the talks failed, the government should amend the design of the MRRT and PRRT to “remove the open-ended crediting of all royalties imposed by the states”.
The report suggested the link should be severed between the royalty allowance provided and state policies. Then state royalties on iron ore, coal and petroleum should be cut by around one-third.
And the commonwealth should then guarantee to increase payments to each state to offset the royalty revenue foregone.
“Most of the revenue to do this will come automatically through increased MRRT and PRRT collections,” the report said.
I still don’t think the Government will have the stomach for this fight. The states have no political incentive to do a deal. Which brings it back to Feds versus miners. 2010 redux?
The full review is below. Just what you need for Friday afternoon reading.
