Australia's Queensland to join mining tax challenge

MELBOURNE/CANBERRA (Reuters) - Australia's northern Queensland state plans to join a challenge to the federal government's Minerals Resource Rent Tax (MRRT) in the High Court, saying the tax unfairly discriminates against the resource-rich state, the state government said on Monday.

Queensland's attorney-general Jarrod Bleijie told reporters the state will join the legal action launched against the tax by Fortescue Metals Group, Australia's No.3 iron ore miner.

"We are one of the biggest resources states in Australia along with Western Australia so it's important we protect that and do everything we can to protect that as much as we can," Bleijie said.

He also told local media that legal advice supported his state's view that the new tax discriminates between states, raising the possibility it is constitutionally invalid.

Treasurer Wayne Swan said the challenge was a political action from Queensland's conservative government, and would waste taxpayers' money.

"It appears that the Queensland government is prepared to waste taxpayers' money on a futile challenge," Swan told local media.

He said the government was confident in its legal advice that the tax would withstand the challenge, adding the other resources-rich state Western Australia also saw the challenge as futile.

"If you listen to the premier of Western Australia has to say, he doesn't think such a challenge will be successful," Swan said.

The Western Australian government was not immediately available to comment.

The 30 percent tax on mining profits was passed last year by Prime Minister Julia Gillard's minority government, after 18 months of acrimonious debate that brought down former prime minister Kevin Rudd.

It came into effect on July 1, and is expected to raise A$9.7 billion ($9.9 billion) over its first three years for the federal government budget.

(Reporting by Victoria Thieberger and Maggie Lu Yue Yang; Editing by Kim Coghill)