I agree with both of you on the RRT. But I think we need to keep in mind the time it will take to bring it into effect, if at all, and the fact that the states are not likely to surrender their entitlement to royalties without being compensated for it. The states are after all the owners of minerals in the ground (outside of the territories) in right of the commonwealth. Issues like this will drag things out for some time.
My guess is there will be considerable constitutional pondering going on and I'd be astounded if BHP was not talking to its counsel with a view to bringing a reference before the High Court to rule on the ability of the commonwelth to regulate mining royalties. Don't be fooled, this proposed tax amendment has only been coloured to look like a tax amendment.
This is arguably the commonwealth abridging state powers, in relation to mining. The tax is linked to the mining operation, which itself is run by the state. If the commonwealth wants to implement the tax, imo they'll have to take full regulatory control of mining away from the states, or enter into a power sharing agreement. This may be on the books, but it would be a full backflip on the approach taken by the labour governments when they challenged the workchoices legislation enacted by the former coalition gov't.
Howard looked at doing this years ago, albeit in the context of uranium...and the high court may have allowed such a power taking after extending the scope of the commonwealth's power to regulate corporations (in workchoices). So, it seems to me the labour governments are doing a complete 180 on their previous stances and ought to be brought to account. Someone bring a bloody consitutional reference before the high court, or I might...becuase this is going to hurt.
WU
AOE Price at posting:
$3.93 Sentiment: Hold Disclosure: Held
