house of cards

Are the worms turning ?

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December 23, 2010, 5:19 am

Key independent Rob Oakeshott has warned the Gillard Government's minerals tax "remains in doubt" because no member of Parliament could know if it was in the national interest.

In a further sign of the trouble Julia Gillard and Treasurer Wayne Swan will have in turning the mineral resources rent tax into law, Mr Oakeshott said it was still unclear whether the proposal and the concessions granted by the Government were in the interests of the ALP or of big miners.

Further complicating the debate, the Greens complained the MRRT would short-change Federal coffers between $10 billion and $20 billion a year - a sign the party that will hold the balance of power in the Senate from the middle of next year may play hardball over the tax.

It follows the release earlier this week of the policy transition group's report and 94 recommendations on the MRRT.

It said the Government should honour the June agreement between the Prime Minister and BHP Billiton, Rio Tinto and Xstrata that any future State royalty increases be credited under the MRRT.

But the group also argued the Government must reach agreement with the States and Territories not to increase inefficient royalties.

Mr Oakeshott, who with Greens MP Adam Bandt and independents Tony Windsor and Andrew Wilkie supports the Government, said he wanted to see the "substance".

He said until then it would be hard to do a "national interest test" on the tax. "It is difficult to determine whether a government's interests, a political party's interests, a mining sector's interests, or some other interest is taking precedent over the national interest," Mr Oakeshott said.

"Until Parliament receives something of substance in 2011, the MRRT logically remains in doubt."

Greens leader Bob Brown, who supports the original resources super profits tax, held fire on whether his party would back the MRRT if it reached the Senate.

The Government's decision to accept credits on future royalty rises also puts pressure on the WA and Queensland governments which would face an outcry from mining companies if they proceeded with any tax increases.