Will Australia’s RSPT be a boon for the developing world?

by Tim Wilson, June 14, 2010

Australia is currently considering a new tax regime for the resources sector. Politically it is unpopular with the mining industry and popular with unions and the welfare sector. It’s understandable that the welfare sector supports more taxation that they will be the beneficiaries of. But it seems odd that the union movement is supporting more taxation on an industry that they rely on for jobs. In any case, the mining industry is arguing that this new tax will result in less mining investment in Australia. And already some mining investments have been put on hold. But the capital of mining companies doesn’t sleep and will surely be put to an alternate purpose, such as developing mines in countries that are currently less attractive. The unions may not realise it, but countries like resource-rich but more profit-marginal Papua New Guinea could be the beneficiaries of their advocacy. Not their workers.

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