Shockingly low mining tax needs fixing: Greens

Treasurer Wayne Swan is under pressure to make changes to the mining tax after it was revealed the tax was billions of dollars short of its predicted revenue target.

The Greens are planning to a move a bill in Parliament which they say will fix the loopholes in the MRRT.

Proposed changes include increasing the tax rate to 40%, cutting Commonwealth refunds of state royalty increases and including other minerals as part of the tax, ABC reported.

Independent MP Rob Oakeshott says he supports the Greens.

"[It's] completely outrageous that we've found ourselves in this situation," he said.

"The Parliament is there, and I think majority is on side, in doing what needs to be done to fix some of these loopholes and to turn this into a tax that is working in the national interest rather than against it."

However, Ben Mitchell from the Minerals Council said the tax should not be changed.

"The Minerals Resource Rent Tax is just one of the three major taxes on mining. Company tax and royalties just last financial year raised $22 billion for state and federal governments.

"The MRRT is just a top up tax on top of those other very large taxes.”

Mitchell argues the tax is operating as it should because it is designed to raise revenue when profits are high.

The opposition, which plan to scrap the tax if elected in September, have described the tax as a "dog's breakfast", and blamed the government for negotiating the tax with major miners BHP Billiton, Rio Tinto and Xstrata.

"If Wayne Swan had any self-respect, he would resign. He is totally incompetent," shadow treasurer Joe Hockey told reporters.

'The Coalition has said for some time that Labor's MRRT was a fiscal train wreck in the making,' an opposition Treasury spokesman said.

Swan blamed a drop in commodity prices and a high Australian dollar for the massive shortfall.

The government’s mining tax only raised $126M in its first six months, a figure well short of predictions the tax would raise $2 billion for the 2012-13 financial year.

Prime Minister Julia Gillard defended the tax in New Zealand over the weekend.

"There was always going to be volatility in the MRRT… but I still think it's absolutely fair that at the peak of the profit cycle, Australians see tax from mineral wealth that is dug out of the grounds we all own and the grounds we all share," she said.

Australian Mining reported last year that doubts are being raised over the Gillard government’s expectations of revenue it would collect from mining taxes paid by Australia’s three biggest resource companies.

Image: AAP

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