FMG launches MRRT challenge

THE BAR EXAMINER: The gloves are off and the Australian Law Society is set to establish a third tier to the existing two-speed economy.

The big smiles beneath the wigs came as Andrew Forrest’s Fortescue Metals Group lodged a challenge in the High Court of Australia today against the Federal Government’s Mineral Resources Rent Tax (MRRT).

 

The challenge is on constitutional grounds.

“We believe we have a good case for challenging the MRRT on constitutional grounds and we look forward to the resolution of these important issues by the High Court,” FMG chief executive officer Nev Power said in the company’s announcement to the Australian Securities Exchange.

According to Power the company has taken legal advice and is challenging the tax on the grounds that the MRRT:

–    Discriminates between the States contrary to section 51(ii) of the Constitution;

–    Curtails State sovereignty contrary to the Melbourne Corporation principle;

–    Gives preference to one State over another contrary to section 99 of the Constitution; and

–    Restricts a State’s ability to encourage mining contrary to section 91 of the Constitution.

The MRRT is due to come into effect on 1 July with the intention of raising $10 billion over the next three years.