In Australia, the resources do not belong to everyone. They are vested with the relevant State on behalf of its citizens - ie the Mineral Resources of WA belong to WA and not to the citizens of NSW etc. This is an important disctinction and a reason why I believe the RSPT could be thrown out by the High Court if one of the States were to object. Why has Colin Barnett not raised this point is beyond me.
I agree with other writers here the other problem with the RSPT is not the 40% tax rate but the threshold rate of the long term bond rate at which it applies. This is clearly distortionary as others have pointed out and is a major difference with the Petroleum Resource Rent Tax (PRRT) which applies to offshore oil & gas projects in Commonwealth waters. As pointed out in today's SMH this results in QLD CSM LNG projects potentially being taxed more harshly under the RSPT than WA offshore LNG projects under the PRRT. I am surprised that the Henry review would come up with such a distortion.
