The Australian mining tax is better known as the mineral resource rent tax. This tax is a tax on profits generated from the exploitation of non-renewable resources within Australia. The tax takes 30 per cent on all mining profits that exceed the Government Bond Rate in addition to the usual company income tax, when profits exceed $75 million. The reason this tax should be deemed so appealing to the people of Australia is because it will help to address the imbalances in the economy, while sharing the profits with the Australian people. The average worker would gain an extra $450 per year and tax breaks will be more available to small businesses. Also, within the first three years this mining “super tax” is expected to raise $10.6 billion, which would help to boost the economy and bring the GDP of Australia up by 0.7%. The mining companies pay royalties to the states in which the minerals are being mined. There became a strong demand for these natural mineral resources and the demand led to an increase in the dollar. Recently, the cost of minerals has skyrocketed, yet the royalty payments did not rise quickly enough; calling for the need for this mining tax to be implemented to ensure that the Australian people were receiving a greater share of the profits from the money being made from mining.
Economy theory fit with the topic?
Countries should specialize where they have their greatest absolute advantage (if they have absolute advantage in both goods) or in their least absolute disadvantage (if they have absolute advantage in neither good). We have two countries; Syria and Australia. Syria can produce 10 barrels of Oil a day while Australia can only produce 5. Australia can produce 10 tonnes of Iron while Syria can only produce 5. Who has the comparative advantage? In determining this; we have to determine the opportunity cost, that is to…...