Home News NewsItems Rudd's 'Resource Taxes': some remarks and concerns
Rudd's 'Resource Taxes': some remarks and concerns PDF Print E-mail
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Friday, 30 April 2010 13:52

The West-Australian reports Kevin Rudd is planning to introduce a new federal 'resource tax' on top of the already existing state royalties. These taxes would be used to "deliver company tax cuts, reduce red tape on small business and slash paperwork." We would like to hope that the coming Henry Tax Review could introduce a georgist 'paradigm shift': to shift taxes away from small businesses and jobs, onto natural resources. That we want to encourage. However, Rudd's real motives sound rather worrying:

Kevin Rudd wants to use a new multi-billion-dollar Federal resources tax to slow the WA economy in a bid to ensure that the mining boom does not suck too much money and workers from the Eastern States.

We cannot subscribe to this competitive, zero-sum economic logic: as if the growth of one state will be the decline of the others. The aims of true resource taxes should be:

1. To stimulate productive use of resources and create employment
2. To conserve and discourage waste of resources; protect the environment
3. To collect 'economic rent', the unearned profits that are made from monopolising resources
4. Administrative simplicity

Rudd's proposition does not seem to qualify for any of these criteria. We suggest that instead the existing state royalties could be reformed to better accomplish these aims. It could be agreed then that some of the revenue goes to the federal level so that all Australians get a share of this continent's natural wealth.

Last Updated on Saturday, 24 November 2012 11:47
 
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