The national body representing Australia's minerals industry believes the federal government's planned mining tax is workable and should be made law.
The controversial minerals resource rent tax (MRRT) was passed by the House of Representatives late last year, but still has to be given the tick of approval by the upper house.
Minerals Council of Australia (MCA) chief Mitch Hooke told a Senate inquiry in Canberra on Tuesday the 30 per cent tax on the profits of big coal and iron producers was "workable".
"We have done the best we can with the hand of cards that we were dealt with," he told the Senate economic legislation committee.
"We still have work to do in mitigating the adverse consequences and the unnecessary complexities to the compliance costs.
"But this is a much better designed tax, notwithstanding that it was not necessary in the first place."
Asked if the tax should be passed into law in its current state, he said: "Yep".
Prime Minister Julia Gillard negotiated a heads of agreement for the MRRT with three major miners - BHP Billiton, Rio Tinto and Xstrata - after the original idea of a resource super profits tax (RSPT) caused a bitter row between the former Kevin Rudd-led government and the mining industry.
Mr Hooke said that heads of agreement would not have been supported by the council and its members had it not been consistent with its policy position.
But he did not believe the MRRT discriminated against smaller miners.
He said the consultation process for the RSPT was "abysmal", particularly as it did not include the states and territories in the discussion about royalty reform.
"I can't speak on behalf of the state governments, but I know on the public record many of them were pretty miffed how that eventuated," he said.
In contrast, he said consultations with the MRRT's policy transition group that was led by former BHP chairman Don Argus and Resources Minister Martin Ferguson were "outstanding", and a pretty good model in setting up the design of a new tax with business.
While the federal opposition argues that the design of the tax that will credit all state royalties into the future leaves the budget exposed to future increases in royalties by the states, Mr Hooke said it would have been a "deal breaker" without that clause.
"It goes to the fundamental principle of putting an effective cap on this tax liability, otherwise we just have an escalator all the way through Mount Everest which would put us back in the camp of compromising international competitiveness."
He said while the MRRT provided certainty, investors would be watching developments in the legislation to see whether it passed through parliament and whether the tax stayed.
The tax, which is opposed by the resources rich state of Western Australia, is forecast to raise $11.1 billion in its first three years.
Revenues from the tax will will help fund a cut in corporate tax.
