Fortescue challenges mining tax in High Court
Leonie Lamont and Jessica Wright
June 22, 2012

The federal government faces a new challenge to its mining tax, with Fortescue Metals Group today lodging a challenge to the tax in the High Court.   

In a statement to the ASX, Fortescue chief executive Nev Power this morning said the company had legal advice and would challenge the tax on constitutional grounds.

‘‘We believe we have a good case for challenging the Minerals Resources Rent Tax on constitutional grounds and we look forward to the resolution of these important issues in the High Court,’’ he said.


The Fortescue challenge is based on grounds that the tax discriminates between the states under section 51(ii) of the Constitution.

It further gives preference to one state over another contrary to section 99, and restricts a state’s ability to encourage mining contrary to section 91 of the Constitution, Fortescue says. It also says it curtails state sovereignty.

After 18 months of acrimonious debate that brought down former prime minister Kevin Rudd, the 30 per cent Minerals Resource Rent Tax (MRRT) was passed earlier this year by the Gillard government.

The government expects the tax to reap $9.7 billion over its first three years.

While large miners Rio Tinto and BHP were able to strike a deal with the federal government over the final scope of the tax, smaller miners including Fortescue and Gina Rinehart’s Hancock Prospecting have waged a fierce battle against the tax.

Fortescue has been threatening to challenge the MRRT in the High Court for months, arguing it is unfair and was been stitched up by the government in conjunction with the big miners.   

A spokesman for the acting prime minister and Treasurer Wayne Swan said the challenge had not come as a surprise.

''Mr Forrest has made it clear that he is staunchly opposed to the government spreading the benefits of the mining boom to millions of households and small businesses who aren't in the fast lane,'' he said.   

"The Gillard government believes Australia's non-renewable natural resources belong to all Australians, not just to a handful of mining billionaires, and is determined to deliver the MRRT to ensure the Australian community shares in the benefits and opportunities of the mining boom."   

The government has previously indicated it has considered its constitutional position on the mining tax carefully and is confident the legislation will withstand a challenge.   

In November, constitutional expert Greg Craven told The Age that there were several sections of the constitution that Fortescue could use to sustain a legal challenge to the mining tax.

Just this week the High Court ruled that the federal government had exceeded its implied powers under the Constitution in funding the nation’s schools chaplaincy program.

Assistant Shadow Treasurer, Mathias Cormann said the Fortescue challenge had been ''inevitable''.''The mining tax is a bad tax negotiated personally by Julia Gillard and Wayne Swan through a highly improper process,'' he claimed.

''They negotiated the design of a significant new tax on an important new industry exclusively and in secret with the three biggest mining companies.

''The Gillard government has a very poor track record when it comes to ensuring its policy changes are consistent with relevant legal requirements.

''We look forward to the considerations and findings of the High Court.''



Read more: http://www.theage.com.au/business/fortescue-challenges-mining-tax-in-high-court-20120622-20rzk.html#ixzz1yU9RULcu

Quote:


That belief might have some credence if every Australian paid the same rate / amount of tax to run the place.

The Gillard Government needs more money to pay its debts and to do more pork barrelling.

The Govt gets it's pound of flesh from taxing the profits and the workers and the States get their royalties.

I have no problem with rich people challenging any policy in the high court of Australia to protect their investment.....However when these fat self serving parasites openly admit they currently pay no tax at all under the current system I am not impressed.....Australian's will receive an $18K tax exemption that Twiggy and his mates in the Liberal party oppose for self interest.....If Australia does not spread the benefits of the mining boom we will lose an opportunity to fund a better future for our children for the sake of a chosen few....How many billions do these wankers want???



The chief weapon of sea pirates, however, was their capacity to astonish. Nobody else could believe, until it was too late, how heartless and greedy they were.
Kurt Vonnegut (1922 - 2007), Breakfast of Champions

Mining tax challenge will fail, government believes
Leonie Lamont
June 23, 2012


THE federal government believes its mining tax will withstand challenge by Andrew ''Twiggy'' Forrest's company in the High Court, and is confident the tax legislation is constitutional.   

Fortescue Metals' challenge was lodged in the High Court yesterday and there is speculation other interested miners may join.

Fortescue's director of strategy, Julian Tapp, said the case wasn't about the level of tax. ''We haven't changed our view that our payments in relations to this tax will be negligible in the early years. We believe all other mining companies are in the same boat,'' he said.


"So this is clearly not about trying to reduce our tax liability, this is about attacking a law that we fundamentally believe is against the constitution.''

Fortescue has enlisted arguably the country's pre-eminent constitutional barrister, David Jackson, QC. After seeing details in a writ of summons, constitutional law expert Professor George Williams from the University of NSW said Fortescue had a ''clever argument''.

''It is clear that the challenger does have a solid argument. The High Court in Bath v Alston Holdings in 1988 struck down a state tax by developing a concept of discrimination that applied in not dissimilar circumstances. The analogy is not exact though in the nature of the tax and because the case involved a different section of the Constitution, section 92. It does however give them a line of attack,'' he said.

''My view remains that the legislation is likely to survive challenge, and that this will be a difficult case to win.''

Fortescue argues the mining tax discriminates between the states, and also curtails state sovereignty.

Mr Williams said he ''wouldn't be surprised to see other parties attempt to join'' Fortescue's challenge.

While large miners Rio Tinto and BHP were able to strike a deal with the federal government over the final scope of the tax, smaller miners including Fortescue and Gina Rinehart's Hancock Prospecting have waged a fierce battle against the tax. After 18 months of acrimonious debate, the 30 per cent Minerals Resource Rent Tax was passed earlier this year. The Gillard government expects the tax to reap $9.7 billion over its first three years.

A spokesman for acting Prime Minister and Treasurer Wayne Swan said the challenge came as ''no surprise''.   

''[Fortescue chief Andrew Forrest] has made it clear that he is staunchly opposed to the government spreading the benefits of the mining boom to millions of households and small businesses who aren't in the fast lane,'' he said.   

''The Gillard government believes Australia's non-renewable natural resources belong to all Australians, not just to a handful of mining billionaires, and is determined to deliver the MRRT to ensure the Australian community shares in the benefits and opportunities of the mining boom."     

The government has previously indicated it has considered its constitutional position on the mining tax carefully and is confident the legislation will withstand a challenge.   

Assistant shadow treasurer Mathias Cormann said the Fortescue challenge had been ''inevitable''.

''The mining tax is a bad tax negotiated personally by Julia Gillard and Wayne Swan through a highly improper process,'' he said.

''The Gillard government has a very poor track record when it comes to ensuring its policy changes are consistent with relevant legal requirements.'' With JESSICA WRIGHT


Read more: http://www.theage.com.au/national/mining-tax-challenge-will-fail-government-believes-20120622-20tt3.html#ixzz1yZdkfuwo