Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Wong—and some notice was given of this question yesterday. Given the government has significantly downgraded its mining tax revenue estimate in MYEFO and revelations that in fact none of the three big miners who negotiated Labor's complex mining tax appear to have paid any MRRT so far, to what extent as a proportion of the overall fiscal impact is the lack of revenue from the mining tax so far due to (a) lower than expected commodity prices, (b) lower than expected production volumes, (c) a higher than expected Australian dollar, (d) state royalty credits claimed against any MRRT liability and (e) the depreciation of relevant capital costs using the market valuation method as per the Gillard government's special mining tax deal with the three biggest miners?

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

I think this is actually the same set of questions I was asked yesterday. As I said in answer to a question from Senator Cormann then, first, the government has written down MRRT revenue significantly as a result of the larger than expected drop in commodity prices that we have seen in the last few months. The write-down is in the order of $4.3 billion over the forward estimates. As the senator would know, there are obviously swings and roundabouts in MRRT revenue, a profit based tax, so by design it will collect more when profits are high and less when profits are low.

I think on the last occasion I did refer the senator, although I did not finish the answer, to the PRRT, which, as he would probably know, has been around for 25 years. It is also a volatile but important source of revenue. For example, in 1998-99 that resource rent tax collected half the amount that was forecast but then a couple of years later raised nearly twice the amount forecast, the point being that these profit based taxes are obviously more volatile. But I do not think anybody on that side of the chamber is suggesting that we should be abolishing the PRRT.

The answer to the question, therefore, is that the government has taken a range of factors into account, particularly the significant drop in commodity prices since the budget, and the government has revised down, given all of the circumstances, the MRRT revenue by the amount that is set out in the mid-year review.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Is the minister suggesting that the whole revenue write-down for the MRRT is due to lower commodity prices? If not, have any royalty credits been claimed against any mining tax liability so far as per the government's Minerals Resource Rent Tax heads of agreement with the big three miners?

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

Through you, Mr President, I think yesterday I did answer a question from Senator Brandis about royalties, and I made clear that the Queensland royalty decision has been taken into account in terms of the—

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I rise on a point of order on the requirement to be directly relevant. The minister should not be trying to answer a question she was asked yesterday. The question is not about factoring in decisions by state governments to increase their royalties. The question is whether any taxpayer of the mining tax has yet claimed any royalty credits. Has any royalty credit actually been claimed against any mining tax liability? Yes or no? It is not about factoring in decisions by various state governments about actual claims being made.

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

Order! The minister has been going for 16 seconds. I am listening closely to the minister's answer. The minister is in order. The minister has 44 seconds remaining.

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

The government does not discuss the individual tax affairs of companies—

Senator Conroy interjecting—

and, as much as Senator Conroy is egging me on to break the law, I do not intend to do so, thank you very much! I am trying to assist the senator by explaining to him that the issue of royalty crediting has been considered in the MYEFO and is reflected in the bottom line.

Opposition senators interjecting—

Senator Cormann interjecting—

No amount of shouting is going to change my answer, Senator. It is reflected in the write-down that I have advised you about. As I said yesterday, the Queensland decision has been included in the updated MRRT estimates.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Is there any circumstance under which the government would reconsider the merits of a tax which is costly to administer, costly to comply with and which does not appear to have raised any revenue? Is there any circumstance under which this government would scrap their failed mining tax, or will Labor just try and make up the revenue shortfall by going back to a higher mining tax rate and a broader base?

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

Again, I think that was perhaps a less loud rant than yesterday. I am not sure what the question was. If the question is—

Senator Brandis interjecting—

George, good try! If the question is if the government is proposing any changes to the MRRT, the answer is no, and I think that has been asked and answered on many occasions. What the government has done is reflect the changes in commodity prices in particular in the updated MRRT estimates, which are also reflected in the budget bottom line and which have the budget returning to surplus this year and surpluses growing beyond in an environment where revenues have dropped by some $22 billion.