The Federal Government is considering making controversial changes to the mining tax in order to stop state governments stealing its revenues.
A panel commissioned to examine the distribution of GST wealth has suggested revising the mining tax in order to close a loophole that allows states to gouge MRRT revenue by raising royalties, Fairfax Media reports.
Treasurer Wayne Swan has already flagged withholding GST revenue from states as a penalty for raising royalties, but no decision will be made about changing the mining tax until the panel’s final report is out.
According to Fairfax Media the Government is likely to win support from the Greens and independent MP Rob Oakeshott for a plan to close the loophole.
The move comes as WA Premier Colin Barnett flags his own changes to state royalties.
According to The West Australian Barnett is considering offering magnetite iron ore juniors relief from royalties in their first year.
The plan is part of a move to boost investment in the fledgling industry, and Barnett said it still needed approval from Cabinet.
“We want to give a very clear signal not only in this state but across this nation and into China and Japan that they WA Government is not going to tax this industry out of existence, we’re going to do exactly the opposite,” he said.