Ross Garnaut and Anthony Clunies Ross set out the idea: let a project recover its costs and a normal return, then tax the extra profit, the 'rent'.
- Date
- 1 January 1975
- Headline figure
- The idea
In 1975 the economists Ross Garnaut and Anthony Clunies Ross published “Uncertainty, Risk Aversion and the Taxing of Natural Resource Projects” in the Economic Journal. Their resource rent tax waits until a project has paid back its costs plus a set rate of return, then takes a share of the profit above that line.
It is the idea the PRRT is built on: tax the windfall, not the investment.
Source: Garnaut and Clunies Ross, Economic Journal, vol. 85, no. 338 (1975)