The High Court challenge led by Andrew Forrest's Fortescue Metals to the validity of the mining tax has been dismissed unanimously by the full High Court. ''The treatment of state mining royalties by the MRRT Act … did not discriminate between states and that the acts did not give preference to one state over another,'' the court ruled.
Before the court, lawyers representing the federal government rejected the claims of Fortescue lawyers that the mining tax had inhibited the states from developing their resources.
Mr Forrest's lawyers contended that the federal government had punished the states for reducing royalties for individual mining companies by imposing the tax, which is levied across the board.
Fortescue said it was ''disappointed'' by the High Court ruling, pointing out that the ''very low'' level of revenue collected by the tax vindicated its opposition to it.
Opposition Leader Tony Abbott has promised to repeal the tax should his Coalition win the federal election. Mr Abbott has said the revenue shortfall was an example of the government's failure to manage the economy.
Treasurer Chris Bowen welcomed the High Court decision. He said he had no plans to change the tax if Labor was returned to government.
The structure of the MRRT offsets any reduction in state taxes, so if Western Australia cuts levies in a bid to spur development the federal tax rises and eliminates the difference. That inhibits states from offering tax breaks to companies agreeing to finance development in remote regions, WA argued in a filing to the High Court late last year.
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