I have my doubts about the Commonwealth's right to levy this Resources Super Profits Tax (RSPT). The States have a right to levy Royalties on onshore minerals because they own the rights to those resources on behalf of the community. My view is that the RSPT is by very nature a form of Royalty very much like the Petroleum Resource Rent Tax the Commonwealth levies on offshore petroleum where the mineral rights are vested with the Commonwealth.
While the RSPT proposal allows the companies to deduct existing State Royalties, it effectively precludes the States from increasing them. This gives the States a good reason to challenge it.
What surprises me most is that this issue does not appear to have been canvassed in the press. I wonder if the States are somewhat complicit having done a deal to split the goodies. Any thoughts on this?
RIO Price at posting:
$68.71 Sentiment: None Disclosure: Held
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