Quit headline-grabbing and focus on the facts
letter published in The Australian, 25 May 2010
The Treasurer claims revenue from the resource super-profits tax will allow reductions in company tax rates, deliver tax relief for small business, allow investments in vital infrastructure and build the pool of national saving (“A tax that will boost growth”, Commentary, 24/5). But reductions in one tax and expenditures on infrastructure are not dependent on revenue from the RSPT.
The estimated $3 billion from RSPT revenue in 2012/13 , for example, could readily be obtained by reducing total projected expenditure of $381 billion in that year by 0.7 per cent. For the next year the reduction in spending would be 2.3 per cent. A small improvement in the efficiency of spending programs, including a reduction in wasteful spending on renewable energy programs, would allow such savings.
Savings could also be made by eliminating from the RSPT the government guarantee on losses incurred by mining companies. While no estimate is given for such losses, it is surely totally wrong for taxpayers to fund losses in any industry, let alone mining. The moral hazard would invite the same kind of “investors” as participated in insulating roofs and building schools.
Des Moore
(Former Treasury deputy secretary)
South Yarra, Vic
PS Note that in defending the RSPT the Treasurer, strangely, used an international analysis of effective company tax rates that was not only a draft but not peer reviewed either. In the debate on climate change we are told that only peer reviewed analysis is relevant.