fortescue challenges mining tax in high court

Fortescue challenges mining tax in High Court



Leonie Lamont
June 22, 2012 - 10:01AM Read later
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The federal government faces a new challenge to its mining tax, with Fortescue Metals Group today lodging a challenge to the tax in the High Court.

In a statement to the ASX, Fortescue chief executive Nev Power this morning said the company had legal advice and would challenge the tax on constitutional grounds.

‘‘We believe we have a good case for challenging the Minerals Resources Rent Tax on constitutional grounds and we look forward to the resolution of these important issues in the High Court,’’ he said.

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The Fortescue challenge is based on grounds that the tax discriminates between the states under section 51(ii) of the Constitution.

It further gives preference to one state over another contrary to section 99, and restricts a state’s ability to encourage mining contrary to section 91 of the Constitution, Fortescue says. It also says it curtails state sovereignty.

After 18 months of acrimonious debate that brought down former prime minister Kevin Rudd, the 30 per cent Minerals Resource Rent Tax (MRRT) was passed last year by the Gillard government.

The government expects the tax to reap $9.7 billion over its first three years.

While large miners Rio Tinto and BHP were able to strike a deal with the federal government over the final scope of the tax, smaller miners including Fortescue and Gina Rinehart’s Hancock Prospecting have waged a fierce battle against the tax.

Fortescue has been threatening to challenge the MRRT in the High Court for months, arguing it is unfair and was been stitched up by the government in conjunction with the big miners.

In November, constitutional expert Greg Craven told The Age that there were several sections of the constitution that Fortescue could use to sustain a legal challenge to the mining tax.

Just this week the High Court ruled that the federal government had exceeded its implied powers under the Constitution in funding the nation’s schools chaplaincy program.



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Read more: http://www.theage.com.au/business/fortescue-challenges-mining-tax-in-high-court-20120622-20rzk.html#ixzz1yTrCf8e0