Economic Analysis of the Government’s Recent Mining Tax Proposals


  • This article was originally prepared to support a presentation made by Brian Parmenter at Norton Rose on 15 June 2010.

Brian Parmenter, Frontier Economics, Level 1, 33 Queen Street, Brisbane, Queensland 4000, Australia. Email:


We explain the mechanics of resource rent taxes, including the RSPT that was proposed by Kevin Rudd in May 2010. We discuss the key design flaw of the proposed RSPT as applied to new projects and the issues of retrospectivity associated with the RSPT proposal. We outline some deficiencies in the economic modelling on which the government relied in support of the RSPT and propose revised modelling to overcome the deficiencies. Finally, we review the revised mining-tax proposals announced by Prime Minister Gillard in July 2010.