Mining royalty hikes backed
THE Federal Opposition is backing the right of state governments to increase the royalties they collect from mining companies, even if the hikes are ‘‘ injudicious’’.
It has also warned that lofty expectations of a revenue bonanza from the Gillard government’s planned minerals resource rent tax ( MRRT) could lead to a structural budget deficit.
The Government appears to have settled on a framework for the tax after accepting all 98 recommendations of a policy transition group.
But legislation setting up the tax won’t be drafted until later in the year, prompting scorn f rom Opposition t reasury spokesman Joe Hockey.
‘‘ This is version four of the mining tax and it hasn’t even got to parliament,’’ he said yesterday.
The latest version, based on a pre-election agreement between the Government and three of the nation’s biggest miners – BHP Billiton, Rio Tinto and Xstrata – included a ‘‘ blank cheque’’ for the state governments to raise mining royalties. The Government proposes to credit the royalties coal and iron ore miners pay to the states against their MRRT liabilities to the commonwealth.
Opposition Leader Tony Abbott said royalties were effectively a resources rent tax.
‘‘ Let the commonwealth get company tax ( on profits) and the states take royalties,’’ he said, adding it was a form of oppression to take from people in the good times and not give it back in the bad times.
Mr Abbott backed the right of state governments to increase royalties, even though the Gillard government had made threats to dissuade them from doing so.