Australia is not benefiting enough from the sale of its natural resources.

The value of top mineral production between 2006–2007 totalled around $100 billion. But the Australian community saw little more than 7 per cent returned in state and Commonwealth tax revenue.

Compared with other nations, we are flogging off our vast natural resources at a cut price.

The Greens believe that these rich mineral resources, and the wealth they generate should be shared by all Australians. The minerals are public property until converted, by government licence, into private extraction rights.

While the most recent resource boom brought billions of dollars of profit to mining and resource companies, the benefit to Australian communities is more questionable. Indeed in many places negative impacts including increased rent, housing and skill shortages and strained infrastructure have been more apparent. Billions of dollars of public money have funded infrastructure – road, rail, and wharves – to fund the boom.

With predictions of the post-GFC resource boom prompting warnings from the Reserve Bank, a mechanism is needed to ensure a fairer share of the benefits are delivered to the community in the long term.

The Greens propose the creation of a 50 per cent resource rent tax on mining company profits, to be collected into a National Resources Fund. The fund will allow the Commonwealth to invest in the infrastructure required to furnish a just society for the next 100 years, not just the next 10.

A resource tax has already been mooted as part of the Henry Tax Review. Treasury Secretary Ken Henry has told the state treasurers that Treasury estimated that resource companies should be paying about $20 to $25 billion more if a profits-based tax system (resource rent tax) was applied.

A resource rent tax as proposed by the Greens would raise between $5 billion and $10 billion plus a year, in boom periods, for the National Resources Fund. This would pay for investment in energy efficiency and renewable energy to combat climate change, public education, public transport, planning and investment in infrastructure and services for Australia's ageing population. The investments would be restricted to a set of public-interest guidelines.

The Norwegian Government established a similar scheme in the 1970s in response to the sudden increase in income from the North Sea oil boom. Recognising that oil reserves are limited, the Norwegian Petroleum Fund manages the large and variable income from the oil boom to ensure its availability for future generations.

Revenue raised through our resources rent tax would be placed in the similar National Resources Fund, to be managed by the Future Fund.

Given the location of the majority of resource development projects and the significant disadvantage of the local indigenous communities, investment in those communities should be given special significance. The Greens proposal would also ensure that no state is disadvantaged under the proposed minerals tax regime and maintain where necessary (as in Western Australia) the principle of a fixed proportion of royalty return to regional areas.

First published here