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An analysis of the Western Australian gold royalty

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  • Fraser, Rob W.

Abstract

This article analyzes the modified form of ad valorem royalty recently announced by the WA government in relation to gold production, which features a threshold price below which there is no tax liability and compares this royalty with a profit-based royalty. The level at which the threshold price is set plays an important role in determining the performance of the royalty in relation to its impact on production and the expected level and variability of tax revenue. It is argued that the higher this price is set, the stronger the grounds for preferring a profit-based royalty, eve taking into account the reliability of each form for generating tax revenue.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:aareaj:117030
    DOI: 10.22004/ag.econ.117030
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    References listed on IDEAS

    as
    1. Garnaut, Ross & Clunies Ross, Anthony, 1979. "The Neutrality of the Resource Rent Tax," The Economic Record, The Economic Society of Australia, vol. 55(150), pages 193-201, September.
    2. Fraser, Rob W., 1988. "A Method For Evaluating Supply Response To Price Underwriting," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 32(1), pages 1-15, April.
    3. 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.
    4. Conrad, Robert F. & Hool, Bryce, 1981. "Resource taxation with heterogeneous quality and endogenous reserves," Journal of Public Economics, Elsevier, vol. 16(1), pages 17-33, August.
    5. 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.
    6. Fraser, Rob, 1993. "On the Neutrality of the Resource Rent Tax," The Economic Record, The Economic Society of Australia, vol. 69(204), pages 56-60, March.
    7. Rob W. Fraser, 1988. "A Method For Evaluating Supply Response To Price Underwriting," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 32(1), pages 22-36, April.
    8. 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.
    9. 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.
    10. P. B. R. Hazell & M. Jaramillo & A. Williamson, 1990. "The Relationship Between World Price Instability And The Prices Farmers Receive In Developing Countries," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(2), pages 227-241, May.
    11. 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.
    12. Emerson, Craig & Lloyd, P J, 1983. "Improving Mineral Taxation Policy in Australia," The Economic Record, The Economic Society of Australia, vol. 59(166), pages 232-244, September.
    13. 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.
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    Cited by:

    1. Akpalu, Wisdom & Parks, Peter J., 2007. "Natural resource use conflict: gold mining in tropical rainforest in Ghana," Environment and Development Economics, Cambridge University Press, vol. 12(1), pages 55-72, February.
    2. Kingwell, Ross S., 2001. "Charging for the use of plant varieties," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(2), pages 1-15.
    3. 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.

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