Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Wong. Given that the Gillard government made an open-ended commitment in its mining tax deal to credit all relevant state and territory royalties against any resource rent tax liability, what is the dollar value of all of those royalty credits accumulated by all iron ore and coal miners to date which they can deduct from any future resource rent tax liability?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

It is the case that the design of the MRRT, as the chamber knows, does credit state royalties. Regrettably, we have seen somewhat reckless decisions made by states in recent times. I would remind those opposite that royalties are an inefficient tax.

Opposition Senators:

Opposition senators interjecting—

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I will take the interjection from that end of the chamber.

John Hogg (President) Share this | Link to this | Hansard source

No, Senator Wong. Just address the question. Ignore the interjections.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I am attempting to ignore the interjections. I would make the point that those opposite are so critical of this government in many ways but they are very happy to support the Queensland government's royalty increases.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I rise on a point of order. I was very specific. In fact, I restated it twice: what is the dollar value of all those royalty credits accumulated by all iron ore and coal miners to date? What is the value?

John Hogg (President) Share this | Link to this | Hansard source

There is no point of order.

Honourable senators interjecting—

Order! The conduct of question time would be much better without interjections. I made it clear that the interjection was disorderly and I did draw the minister back to the question. I believe that the minister is answering the question. The minister now has one minute and seven seconds to answer the question.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The most up-to-date figures for the MRRT are those released in the mid-year update, which is the MYEFO, where, as we have stated, the revenue to be received under the MRRT has been written down. Obviously the update would have to include all policy decisions taken to the time at which MYEFO was prepared. The senator can rest assured that royalty increases that have been announced have been taken into account in the revised revenue figures, certainly in respect of Queensland. I make this point, however, again: royalties are an inefficient tax. The Henry review made very clear—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Mr President, I rise on a point of order going to relevance. The minister was asked about the dollar value of royalty credits. That is all the question was about. She has not addressed the issue of royalty credits whatsoever in this answer and she has not even attempted to go near giving a dollar value of those royalty credits. These questions are written specifically and we are entitled to a directly relevant answer, and in fact the minister is obliged to give a directly relevant answer.

Jacinta Collins (Victoria, Australian Labor Party, Parliamentary Secretary for School Education and Workplace Relations) Share this | Link to this | Hansard source

Mr President, I rise on the point of order. If senators on the other side listened rather than made continual points of order during Senator Wong's contribution, they would hear, as indeed I did, that she has been addressing the issue of royalty credits. She indicated that the update includes policy changes related to, amongst other things, royalty credits and was highlighting the impact of some reckless state behaviour in increasing them, which of course affects the dollar figures that you are referring to.

John Hogg (President) Share this | Link to this | Hansard source

Order! I cannot instruct the minister how to answer the question. I am listening closely to the minister's answer. The minister has 22 seconds remaining. I believe there is no point of order at this stage.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I will spell it out very simply: the government has taken into account the announced royalty changes by the Queensland government. As I have previously indicated in this place, the government is not in a position to take into account the decision by New South Wales, given the specific policy details are to be announced. Any changes to the revenue have been reflected in the MRRT figures to which I have referred. (Time expired)

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Does the government now concede that its promise in its special deal with the three biggest miners to credit all royalty payments on iron ore or coal, including future increases, against any resource rent tax liability has encouraged five out of six state governments around Australia so far, including the Labor governments in South Australia and Tasmania, to increase royalties on iron ore or coal?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

This is the Senator Cormann line, which is: the decisions of state governments are all the federal Labor government's fault. This is your reason for supporting Campbell Newman's job-destroying royalty increase: it is all our fault, and he could not help himself. That is the answer: he could not help himself. I would say on this—

Honourable Senators:

Honourable senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! The debate across the front of the chamber needs to cease.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

We do agree—and we would be very pleased if the opposition were prepared to agree to this as well—that we need to remove the incentives to increase royalties, and that is why the Treasurer asked the GST distribution review to look at ways to address the issue of states raising inefficient royalties. If the coalition were serious about this issue they might actually approach that review in a more constructive fashion, but I suspect that the day the coalition are constructive is a long way off.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Why does the government think it is appropriate to impose a complex new national tax on an important industry which does not raise any money but has provided a direct incentive to the states to increase their royalties to take advantage of Labor's royalty crediting arrangement? Surely even this Labor government must now concede that its mining tax is an unmitigated disaster.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

If I may say, for an opposition that wants us to be directly relevant, it is hard to discern a question in that rant.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

A stream of consciousness!

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

A stream of consciousness? Perhaps a little bit theatrical, but I find it hard to discern what question I am supposed to answer. If the senator is so concerned about the mining industry, which I think was part of his question, I invite him to consider Rio Tinto's comments about the Queensland government's decision:

We are shocked, surprised and very disappointed by the size of the royalty increase … [which] will further endanger jobs and investment in the coal industry.

I invite the senator to consider the Queensland Resources Council's statement:

It will mean job losses. It risks further mine closures and there are many coal projects on the drawing board that will now never get off that drawing board.

I invite him to consider those issues when he next wants to speak about the taxation of mining. (Time expired)