The High Court on Wed 7.8.2013 unanimously dismissed proceedings brought by Fortescue Metals Group Limited (“Fortescue”) challenging the constitutional validity of some provisions of the Minerals Resource Rent Tax Act 2012 and other related “imposition” Acts, which created and imposed a minerals resource rent tax (MRRT) with effect from 1 July 2012. The other related imposition Acts were the Minerals Resource Rent Tax (Imposition-Customs) Act2012, the Minerals Resource Rent Tax (Imposition-Excise) Act 2012 and the Minerals Resource Rent Tax (Imposition-General) Act 2012.
Specifically, Fortescue argued that provisions of the Acts were invalid on 4 grounds:
(a) as laws with respect to taxation, which discriminate between States contrary to s 51(ii) of the Constitution;
(b) as laws or regulations of trade, commerce or revenue which, contrary to s 99 of the Constitution, give preference to one State over another;
(c) as laws which contravene the “Melbourne Corporation” doctrine that the legislative powers of the Commonwealth do not authorise legislation directed to the control or hindrance of the States in the execution of their functions; and
(d) as laws that are inconsistent with s 91 of the Constitution, which preserves a State’s power to grant aid or bounty on mining for other metals.
However, the Full Court unanimously dismissed the challenge to the validity of the Acts on all 4 grounds.
- In particular, the Court held that the treatment of State mining royalties by the MRRT Act and the Imposition Acts did not discriminate between States and that the Acts did not give preference to one State over another.
- The Court also rejected the submissions that the Acts breached the “Melbourne Corporation” doctrine or that they contravened s 91 of the Constitution.
(Fortescue Metals Group Limited and Ors v The Commonwealth of Australia [2013] HCA 34, High Court, French CJ, Hayne, Crennan, Kiefel, Bell and Keane JJ, 7 August 2013.)
[LTN 151, 7/8/13]