ReSPecT

My immediate reaction to the RSPT proposal was to wonder if it will ever get through parliament as proposed and to suggest that at least the hurdle rate needed to be substantially raised. Today in the Australian, Henry Ergas discusses the "Brown tax" named after E. Carey Brown. I'll admit that I hadn't heard that term before. A quick search found a reference to this in a working paper by Ben Smith on the topic. Obviously, I need to study this further. But, would we want the ideal tax described by Ergas, where the government becomes a coinvestor on each mining project? After divesting assets such as Telstra in Australia partly because they were seen as too risky why would we want to take on the risk of investing in the mining industry?

Note that the "resource rents" referred to in this context are not the same thing as the resource rents referred to in the capital theory of sustainability. Some sort of royalty payment would seem to be the way to try to capture those, I think.

Also, see the very interesting commentary from Peter Martin.

The original proposal for the resource rent tax actually being discussed is in a paper in the Economic Journal by Ross Garnaut and Anthony Clunies-Ross in 1975.