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?
Comparative Advantage:
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 say, how much of a good we give up to produce another. If Syria were to produce only Oil, they would produce 10 barrels and would give up 5 tonnes of iron. If Australia were to produce Oil, they would produce 5 barrels and would give up 10 tonnes of iron. So, who has the lower opportunity cost? In this case, Syria has the comparative advantage in Oil and Australia in Iron.
The Heckscher-Ohlin Model:
Countries should produce goods of which the factor required is abundant in the country as they will be able to produce it cheaper and therefore have a competitive advantage. Two countries to think about are China and Australia. Australia is capital intensive because of a small population and its wealth. Therefore, according to the model we should engage in production of capital intensive goods which includes mining which requires large amounts of capital to successfully extract minerals. China on the other hand is a very large country with a large workforce and low labour costs. This makes china Ideal for manufacturing and therefore makes China labour intensive. The Production Possibility frontier or PPF identifies possible production of a country with its given available resources. China and Australia’s PPF will differ because of the different abundances in each country. If Australia were to produce the I-phone, it would give up the opportunity to extract minerals because of the resources given up to produce the I-phone. As Australia is capital intensive and extracting minerals is a capital intensive good, Australia’s PPF will be biased towards the mineral axis.
Mining Tax:
On the left, we can see a diagram of an economy which is exporting minerals. It’s a standard graph which has the consumer surplus in green, producer surplus in blue and the world price between. On the right, we can look at what the economy looks like now that the tax has been implemented. As we can see, Supply and Quantity has fallen, resulting in a shift to the left to S2 and Q3 and has resulted in deadweight loss. Because the world price is still higher than price with tax, producers still sell at world price. The producer surplus has shrunk slightly making way for government revenue.

Dutch Disease
Dutch Disease is a phenomenon whereby the discovery or increase in demand for a natural resource leads to a decline of manufacturing in the given country. It Relies on the fact only two industries exist, Mining and manufacturing. As the natural resources are profitably mined, the PPF is pushed outwards. This leads to wage increases and less competitive manufacturing which can result in unemployment when mining ends.
How have government policies affect the industry?
Mining super profit tax (MRRT) is a tax on profit generated from the exploitation of non-renewable resource in Australia. It has replaced by Resource super Profit Tax (RSPT). In 1 July 2012, the tax increase on 30% of the super profit from the mining of iron and Coal in Australia. The company pay the tax when its annual profit reach 75 million, a measure designed so not to burden small business. It will affect over 300 companies by the change. Australia found to be significant ahead of any other region in the world for mining investment. Especially in its handling of economic, social issues and political. Australian’s rating fell 0, 7 points to 56, 3 in ranking but still ahead of Canada as 54.3. The Canadians come close to Australia of improvement in social issues. The concerned that our international competitive can catch up with us in short time. Cause Australia has high taxes compared with other countries. There are also speculations about further imposts on the sector despite the fact that industry already in high cost.
What is the justification for current policies? * Spent on pensions we can gain more from RSPT to increase pensions for workers and for countries. The taxes we pay can increase more quality of life for many unemployment people. * Tax cuts for small business
Will be able to pay less tax for government. Increase the number of small business. It helps people saving or spending more. Increase the economic. * Infrastructure projects (Queensland and Western Australia)
Government will be able to build more school, building, bridge and facilities for people. Reduce revenue of International business. Reduce revenue of international business will increase power for Australian dollars in exchange market. International business will not taking our money back their countries.
Are the policies universal across Australia and Asia?
The policies only apply for Australia when the union takes good care of employees and their jobs. Businesses have to help and build good facilities, entertainment and Medicare for their employees. There are many different factors like preserved prestige of mining engineers, quality of mining education, salaries, employment opportunities, languages, number of operating mines, and the sustainability of mining area, available resource and safety issues.
Who benefits from the policy? 1. Government- get all the tax revenue 2. Other industrial- While parts of the Australian economy have benefited from the resource boom, other parts have suffered. Strong demand for our resources has pushed the Australian dollar higher, hurting farmers and manufacturers who export Australian-made products as their products have become more expensive to foreign buyers. The higher dollar has also impacted tourism and our foreign-student education industries. As a result, we have what has been described as a two-speed economy. The miners and associated service industries are doing very well, while our exporters are suffering. Labor plans to spend the new mining tax by cutting the company tax rate from 30 percent to 28 percent, and by introducing tax breaks for small business. This would help address the imbalance in our economy, and ensure that the benefits on the mining boom flow through to all Australians. 3. All Australians- Economic modelling by the Treasury as well as independent modelling by KPMG have found that the mining tax would see the average worker gain about $450 a year, due to the flow-on results of cuts in company tax and tax breaks for small businesses. The overall cost of food would drop by 0.9%, clothing and footwear by 1.3%, housing by 1.1%, transportation by 1.7% and communication by 1.4%. The inflation rate would drop by 1.1% which would, in turn, ease the pressure on interest rates and finally, Australia’s gross domestic product (GDP) would rise by 0.7%.
Is Industry or Policy Sustainable in Future without Intervention? Yes, this policy benefits the Australians. And government always keeps the tax policy and introduce new tax policy.

References
Government of Ghana 2013, Government justifies new taxes for mining industry, Government of Ghana, viewed 28 May 2013, <http://www.ghana.gov.gh/index.php/news/features/21800- government-justifies-new-taxes-for-mining-industry>.
Daily Telegraph 2013, Mining Tax Facts, Mining-Tax.com.au, viewed 22 May 2013, <http://www.mining- tax.com.au/>.
Wright, J 2012, ‘The Mining Tax Explained’, The Sydney Morning Herald, viewed 22 May 2013, <http://www.smh.com.au/opinion/political-news/the-mining-tax-explained-20120320- 1vgur.html>.
AMMA 2013, About Us, AMMA Resource Industry Employer Group, viewed 21 May 2013, <http://www.amma.org.au/>.