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The state of resource taxation in Australia: 'An inexcusable folly for the nation'?

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  • Fraser, Rob W.

Abstract

This article discusses the principal claims made for the Resource Rent Tax (RRT) by Garnaut and Clunies‐Ross (1975, 1979) relating to its efficiency and potential for generating tax revenue relative to other forms of resource taxation, and also their concern about the greater uncertainty of these revenues. An analysis of the risk‐return trade‐off associated with a shift from ad valorem royalties to an RRT finds this shift to be worthwhile. Estimates are also provided of the foregone tax revenue from the North West Shelf associated with the use of ad valorem royalties rather than the RRT.

Suggested Citation

  • Fraser, Rob W., 1999. "The state of resource taxation in Australia: 'An inexcusable folly for the nation'?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(3), pages 1-20, September.
    • Handle: RePEc:ags:aareaj:117145
    DOI: 10.22004/ag.econ.117145
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    References listed on IDEAS

    as
    1. Ross Garnaut & Anthony Clunies Ross, 1979. "The Neutrality of the Resource Rent Tax," The Economic Record, The Economic Society of Australia, vol. 55(3), pages 193-201, September.
    2. repec:bla:ecorec:v:53:y:1977:i:141:p:30-50 is not listed on IDEAS
    3. repec:bla:ecorec:v:69:y:1993:i:204:p:56-60 is not listed on IDEAS
    4. repec:bla:ecorec:v:55:y:1979:i:150:p:193-201 is not listed on IDEAS
    5. Bardsley, Peter & Harris, Michael, 1987. "An Approach To The Econometric Estimation Of Attitudes To Risk In Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(2), pages 1-15, August.
    6. Fraser, Rob & Kingwell, Ross, 1997. "Can expected tax revenue be increased by an investment-preserving switch from ad valorem royalties to a resource rent tax?," Resources Policy, Elsevier, vol. 23(3), pages 103-108, September.
    7. repec:bla:ecorec:v:59:y:1983:i:166:p:232-44 is not listed on IDEAS
    8. Ben Smith, 1977. "Bilateral Monopoly and Export Price Bargaining in the Resource Goods Trade," The Economic Record, The Economic Society of Australia, vol. 53(1), pages 30-50, March.
    9. Fraser, Rob W., 1999. "An analysis of the Western Australian gold royalty," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(1), pages 1-16, March.
    10. Garnaut, Ross & Clunies Ross, Anthony, 1975. "Uncertainty, Risk Aversion and the Taxing of Natural Resource Projects," Economic Journal, Royal Economic Society, vol. 85(338), pages 272-287, June.
    11. Fraser, Rob W., 1998. "Lease allocation systems, risk aversion and the resource rent tax," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 42(2), pages 1-16.
    12. Rob Fraser, 1993. "On the Neutrality of the Resource Rent Tax," The Economic Record, The Economic Society of Australia, vol. 69(1), pages 56-60, March.
    13. Hayne E. Leland, 1978. "Optimal Risk Sharing and the Leasing of Natural Resources, with Application to Oil and Gas Leasing on the OCS," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(3), pages 413-437.
    14. CRAIG EMERSON and P. J. LLOYD, 1983. "Improving Mineral Taxation Policy in Australia," The Economic Record, The Economic Society of Australia, vol. 59(3), pages 232-244, September.
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    1. Sunnevag, Kjell J., 2000. "Designing auctions for offshore petroleum lease allocation," Resources Policy, Elsevier, vol. 26(1), pages 3-16, March.
    2. Sunnevag, Kjell J., 2002. "Auctions combined with ex post taxation--expected revenue when three parties want a piece of the cake," Resources Policy, Elsevier, vol. 28(1-2), pages 49-59.

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