The Federal Government has stated that $2 billion in funding for infrastructure upgrades could be under threat if WA tries to increase mining royalty rates under the Mineral Resources Rent Tax (MRRT).
Federal resources minister Martin Ferguson and treasurer Wayne Swan said that pledges, including infrastructure funding for Western Australia, is at risk if the Opposition or State Government deviated from the MRRT, according to The West.
Swan explained that there were mechanisms in place for the Government to be able to stop the States increasing royalty rates.
WA premier Colin Barnett slammed the Government threat to hamstring the State if it increased the royalty rates, adding that it reserved the right to do so.
This comes after Fortescue Metals Twiggy Forrest also attacked the MRRT, saying that it was unfair tax that was essentially designed by BHP.