A step change by the Australian government on the proposed resource rent tax regime

On July 2, 2010, the Australian government announced that the Resources Super Profits Tax (RSPT) would be scrapped. In its place, we now have a newly titled “Minerals Resources Rent Tax” (MRRT) in conjunction with an extension to the existing Petroleum Resource Rent Tax (PRRT) regime.

At first glance the revamp appears to be a step forward in the government’s dispute with the industry. However a significant amount of debate and further consultation is still to come. Importantly, the government has established a Policy Transition Group, headed by Don Argus and Martin Ferguson, to consult with the industry and advise government on implementation. However, we should keep in mind before any of this becomes law, the proposals must pass through a Senate that is influenced by the Greens Party, not to mention an impending Federal Election against a Liberal/National Coalition that is standing firm on its opposition to the reforms.