Essay About Relevant Resource Commodities And Recent Mining Tax

The Tax and Why
Introduction
This paper examines the recent mining tax implemented, its method of application, the effect on the supply and equilibrium price to the relevant resource commodities, as well as other relevant issues such as company behaviour and suitability of the policy reform. Consideration is also given to the immediate impact as of July 2012, with comparison to the expired, and previously proposed, mining tax policies. Economic theory is investigated with regards to why taxes are applied, the different forms of applications, its complications and impacts, some measurable, some not. While it has been difficult to uncover the answers amidst a cloud of emotional views and the influence of politics, there seems to be a vast difference in opinions related to the tax reform between economists, politicians, the public and the mining companies. In addition to this, the effects of an unprecedented mining boom further exaggerate multipliers and insists that supply and demand framework is extended to times gone before, an beyond the current time.

The Tax and Why it’s Introduction
The concept of resource rent was first observed in farming, where “different tracts of land varied in fertility and some closer to markets than others. The difference in the yield between the marginal tract and more profitable tract is the resource rent” (Emerson, 2012) The same principle applies mineral extraction in Australia the justification of the tax by the Government was: “The net effect of applying the tax and refunding royalties will be that highly profitable projects will pay additional tax, and less profitable projects will pay less tax” (Commonwealth of Australia 2010) in Asutralia, miners require a license to exploit a resource, and the resource extraction is subject to taxation. (reference) The Resources Super Profits Tax (RSPT) was proposed by the Rudd Australian Government to commence on 1 July 2012 on the premise that the community will receive a more consistent share in the returns from non-renewable resources. A Non renewable resource (NRR) is a resource like coal or gas that can only be used once and cannot be replaced. This proposition was revised by the Gillard Government to the Minerals Resource Rent Tax (MRRT) and legislated.

It came as a result of a need for “a system that can respond better to the boom‐bust cycle in the resource sector. A large share of the Australian economy is devoted to the resource sector so it is important to get these parts of