FORTESCUE Metals Group has lost its High Court challenge against the Minerals Resource Rent Tax (MRRT), with the court rejecting the miner’s claims that the tax was ‘unconstitutional’.
Fortescue was left “disappointed” when the court unanimously dismissed the argument that the tax discriminated between states and interfered with their government rights.
“Fortescue challenged the MRRT because it was an unreasonable intrusion into an area of state responsibility and that it was also an unfair, discriminator and complex tax,” Fortescue chief executive Nev Power said.
The ruling stated that “the treatment of state mining royalties by the MRRT Act…did not discriminate between states and the Acts did not give preference to one state over another”.
Mr Power said the mining industry already paid more tax than other sectors, with Fortescue expected to pay $1.5 billion in company tax and royalties this financial year, rising to $2 billion in the years ahead.
Fortescue reported it had already incurred MRRT compliance costs of between $3 million and $5 million, despite not earning enough to pay the tax itself.
Mr Power thanked Fortescue’s legal team, WA and Queensland premiers Colin Barnett and Campbell Newman, whose states joined in the action, and Tony Abbott and the Coalition “who have stood by the mining industry with their promise to repeal the MRRT”.
The MRRT is forecast to generate just $4 billion in the next five years, down from the $5.3 billion forecast in the May budget, and just a smallportion of what Labor initially anticipated.