By effectively replacing the inefficient patchwork of state based royalties, which currently apply to operations regardless of profitability, this reform will also assist the sector with its exploration efforts in the future.
It is however disappointing that in forming the RSPT Consultation Taskforce workers and their unions have once again been ignored in favour of business leaders and government bureaucrats. With some of the proceeds of the RSPT earmarked for community development in remote mining areas, the local knowledge that unions and their members can bring to bear is an asset that should not be squandered.
The reform applying to the superannuation tax treatment of the low paid is a step forward too and was also one that the CFMEU called for in our submission to the Henry Tax Review.
The picture is not all rosy though, with the Government's cut to the corporate tax rate caving into the demands of the business lobby, ignoring the fact that on average companies only pay an effective tax rate of 18% already.
Appeasing business with cuts to the corporate rate of tax is a slippery slope. Already greedy corporate interests are pointing to Singapore's 18% corporate rate as a more ‘competitive' tax rate.
One group that desperately need a tax cut is welfare recipients. They can pay an effective tax rate of up to 80% when moving into work as their benefits and concessions are withdrawn. The Henry Tax Review rightly singled out this group for attention. These proposals have not yet been picked up by the Government and we hope that they receive the relief they deserve in the Budget next week.
The CFMEU is pleased that the Henry Review endorsed the Board of Taxation's recent report on the serious deficiencies with the current Alienation of Personal Services Income (APSI) rules. The Review calls for changes that will give better effect to the original intention to reign in bogus contracting arrangements.
All in all not a bad start to a long term process, but as is clear there is still much to address in this vital area of public policy.
May 4th 2010
