Dr Richard Denniss believes the MRRT would be a boon for public services. Photo: Alex Ellinghausen
Broadening the base of the minerals resource rent tax could be exactly what the public service needs to ensure its numbers are not slashed after this year's federal election.
During a Senate hearing into the MRRT on Wednesday, the Australia Institute's executive director, Richard Denniss, argued there was no good economic reason not to broaden the tax's base to include the super profits from more minerals than just coal and iron ore.
After his committee appearance, Dr Denniss told The Canberra Times that if the government went down that path with the MRRT it would be a boon for the public service.
"One of the only advantages of limiting the base of the tax is that it is easier to collect if it is small," he said.
"It would obviously take more public servants to collect and administer a broader minerals tax, but every extra public servant employed would more than pay for themselves by a long shot.
"If the argument is that it would take more people to collect a broader tax then why wouldn't the government do exactly that and employ more public servants?
"More people collecting means far more revenue."
Dr Denniss said public service numbers could be significantly boosted in Treasury proportionate to the number of mining companies paying the tax and the number of minerals included in the scheme.
He said contrary to the current political debate, more public servants did not have to translate into more economic pain. "This highlights the absurdity of [Opposition Leader] Tony Abbott's argument that the way to save the budget is to slash the public service," Dr Denniss said.
"That attitude does not recognise the role public servants perform in actually raising revenue."
Greens ACT senate candidate Simon Sheikh, who is basing his campaign on protecting public service jobs, agreed with Dr Denniss.
"There are some occasions where spending more money on the public service can deliver more not less for the budget bottom line," Mr Sheikh said.
"Expanding the mining tax and hiring the workforce necessary to collect this revenue will help us fund important things like investing in a real education revolution."
Dr Denniss said it was inevitable the tax would be broadened but the "bitter politics" of this election year might not allow it to happen in the near future.