Queensland to escape punishment for royalty hike

The Queensland Government’s decision to raise mining royalties may go unpunished as the Federal government goes silent on the issue, despite its recent threats.

A spokeswoman for Treasurer Tim Nicholls said that as of Friday afternoon, there had been no formal correspondence about intentions to penalise Queensland financially by withholding GST revenue or infrastructure funding for raising mining royalties, The Sydney Morning Herald reports.

As Australian Mining reported last week, Nicholls said the move was expected to raise $1.6 billion over four years and that Federal Treasurer Wayne Swan would be “petty and spiteful” to withdraw funding because of the policy.

Under the mining tax legislation the Commonwealth has agreed to reimburse mining companies for state royalties. This has created a loophole for the states which means they can raise mining royalties in the knowledge that the Federal Government will have to cover the costs.

AAP reports the Greens have announced plans to introduce a private member's bill to prevent the Commonwealth from reimbursing companies for state royalties.

Greens leader Christine Milne said the bill would prevent state governments from rorting the mining tax system.

"Until this loophole is closed, Campbell Newman, [WA Premier] Colin Barnett and Co can lift state mining royalties as high as they like in the full knowledge that it is the commonwealth government who will foot the bill," she said.

 

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