Mining tax spreads wealth to 1% but Bolivia shows different path

Australian Treasurer Wayne Swan said on March 20 that his government’s Minerals Resource Rent Tax (MRRT) was "central to the government’s plan to spread the benefits of the mining boom to more Australians for generations to come".

Lauding the tax, which had passed through parliament the day before, he said the MRRT was about "ensuring all Australians share in the benefits of the mining boom, not just a fortunate few".

Despite this, Swan could point to only three concrete gains from the expected $10.6 billion that the MRRT is forecast to bring in during its first three years: tax cuts for business, investments in infrastructure in mining areas and improvements to workers’

superannuation.

That is, big business will benefit the most. Corporate Australia will save an estimated $1.6 billion a year in tax cuts. And the government will give back much of the tax to mining companies in the form of mining industry infrastructure.

Mining companies will pay far less tax than they would have if the Gillard-Swan Labor leadership had not caved in to the mining magnates’

campaign against former PM Kevin Rudd’s Resources Super Profits Tax.

As for workers’ superannuation, Treasury estimates show that changes to the rate of superannuation paid will cost the government $250 million in 2013-14 and $500 million in 2014-15, while the abolition of age limits will cost $15 million a year between 2013 and 2015.

This amounts to about 10% of the expected MRRT revenue, hardly evidence of "spreading the benefits".

The government has reassured big business that even this small improvement will not come at the cost of their profits. Instead, it will come from workers’ wages.

Superannuation Minister Bill Shorten told the November 23 Australian:

"Increasing superannuation is not a cost in terms of employers, because what happens is it is offset against real wage increases."