Treasury concedes mining tax unlikely to raise forecasted $2bil

Treasury has admitted that the mining tax looks unlikely to raise the $2 billion it was expected to.

Treasurer Wayne Swan’s department has told a parliamentary inquiry into the tax that ''while it is difficult to draw conclusions'' nine months into the financial year, mining tax collections to date suggest revenue for 2012-13 will be lower than estimated last October, the Age reported.

The expected shortfall will increase the pressure on Swan as he tries to find savings before the budget.

 Last month Australian Mining reported that the mining tax had made just $126 million in its first six months, despite government forecasts of $2 billion for the entire year.

Swan has blamed the fall in commodity prices and the high Australian dollar.

The mining tax is being investigated this week, as the Senate's economics committee attempts to determine why the tax has underperformed.

Both Treasury and the Australian Taxation Office will appear before the committee in Canberra on Wednesday in an effort to examine the reasons for the ''apparent deviation'' between forecast and revenue.

The Greens, who say loopholes were created during the negotiation process, have been calling for the tax to be patched up to provide funds for the Gonski education reforms, the national disability insurance scheme and Denticare.

The Greens had called for mining loopholes to be closed earlier this year, which allowed mining companies to deduct the market value of existing assets over many years instead of subtracting the book value over five years.

Greens leader Christine Milne said understanding the deals Labor did with mining companies was ''critical to fixing the flaws'' in the tax.

During negotiations with mining giants BHP Billiton, Rio Tinto and Xstrata, Labor agreed they could deduct state royalties from their mining tax liability.

The agreement means that when a state increases mining royalties on coal or iron ore, the tax’s earnings were reduced.

In February Australian Mining reported that Julia Gillard blamed the state governments for the failed mining tax.

To date the committee has received eleven submissions.

The Association of Mining and Exploration Companies has argued that the tax was ''ill-conceived as it was the direct result of a private and secret consultation process with three large multinational companies''.

Australia Institute executive director Richard Denniss, who will also appear as a witness at the hearing, said the tax was ''deeply flawed''.

The Coalition has vowed to get rid of the mining tax if it wins the September election.

Shadow assistant treasurer Mathias Cormann has said the inquiry will ''confirm the need to scrap it''.

Newly appointed Resources Minister Gary Gray has acknowledged the way the tax was introduced was ''less than perfect'' but last week said he would not change it.

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