Rudd Government told RSPT could be unconstitutional, senate hears

The head of Australian Government Solicitors has confirmed that the Federal Government had been advised that the now-scrapped Resource Super Profits Tax may have been unconstitutional.

The head of Australian Government Solicitors (AGS) has confirmed that the Federal Government had been advised that the now-scrapped Resource Super Profits Tax (RSPT) may have been unconstitutional.

Shadow Attorney-General Senator George Brandis last night questioned AGS head Ian Govey during a Senate Estimates Committee hearing dealing with legal and constitutional affairs, The Australian reports.

AGS prepared advice for the Treasury on the possibility of the RSPT being challenged in the High Court.

The advice suggested the tax may have been unconstitutional on the grounds it had the potential to discriminate between the states.

The counsel suggested the RSPT could have allowed a person mining a resource in one state to receive a different tax refund or credit from a person mining the same resource in another state.

Govey said the AGS had suggested changes to the RSPT to the Government, which at the time was headed by Kevin Rudd.

Upon ousting Rudd and becoming the Prime Minister, Julia Gillard scrapped the RSPT in favour of the Minerals Resource Rent Tax (MRRT).

Govey said he did not know if the MRRT had overcome the constitutional hurdle.

A spokesman for Wayne Swan last night said the MRRT would be implemented to the letter of the Constitution and there were extensive consultations on its legislative design underway.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.