The Mining Resources Rent Tax will stay after the High Court ruled against a challenge which claimed the tax was unconstitutional.

The challenge was undertaken by billionaire mining magnate Andrew Forrest, whose appeal gained the support of the Queensland and Western Australian governments. The basis of Mr Forrest’s claim was that the tax introduced in Kevin Rudd’s first run as Prime Minister discriminated between states and interfered with state government’s right to control mineral resources. 

The High Court unanimously disagreed with the claims by Forrest and his Forteqsue Metals Group, meaning he will continue to pay 22.5 per cent on profits above $75 million from iron ore and coal production, but can deduct state royalties from that.

So far the Mining Resources Rent Tax has fallen short of budgetary forecasts, reportedly bringing in just $126 million in its first six months and expected to raise even less in the future.

Several mining groups have booked credits for the MRRT worth figures in the neighbourhood of $1 billion. Jeffrey Knapp, a University of New South Wales accounting lecturer, says: “Over future periods they're entitled to deductions because the values of their assets for tax purposes are deemed to be higher than the book value they use for their assets in their financial statements.”

Many commenters have expressed the view that the tax does not go far enough to collect royalties for the public from multi-billion dollar mining efforts.