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Royalties cap betrays spirit of constitution: Greens

Sydney Morning Herald

Saturday March 26, 2011


THE Greens have vowed to thwart the Gillard government's threat to dock revenue from any state that increases its mining royalties after the new federal mining tax comes into effect, in a bid to protect the right of states such as Western Australia to fund essential services.The angry response from the Greens came as the West Australian Premier, Colin Barnett, said his state would back a likely constitutional challenge by mining companies against the new federal mining tax laws.The Greens leader, Bob Brown, blasted Labor for "caving in" to the big miners with its mining tax deal, but confirmed his party would reluctantly vote for the watered-down tax on the basis that "the alternative is the Tony Abbott position of no new tax on the miners at all".In order to make good on Labor's election promise to the miners that it would refund to them all current and future state royalties, without effectively offering the states a blank cheque to raise taxes and have the Commonwealth foot the bill, the Treasurer, Wayne Swan, has threatened to "dock" states that put up their mining royalties, by reducing other federal payments for health, infrastructure or GST.Senator Brown said yesterday this threat amounted to an unjustified attempt by the federal government to circumvent the states' constitutional right to raise revenue, and he would look for a legislative means, perhaps through a private member's bill, to stop it."When governments start to try to get around the spirit of the constitution they tend to get into trouble," Senator Brown told the Herald."Maybe it is time for the Senate to reassert itself as the states' house ... we don't know how the government intends to cap any increase in state royalties ... but we are not disposed to the Commonwealth capping the states' ability to raise royalties from these big mining companies ... we think the states too have to raise money for hospitals and schools and public transport."Mr Barnett, who has said he could raise his state royalties as early as May, said every West Australian should be "highly offended" by Mr Swan's threat and his government would back a likely High Court challenge to the legislation by a mining company."Western Australia does not propose to start a High Court action, but I expect one will happen, that would come from the mining companies because they are the ones being taxed ... and if that were to happen we would intervene in support of the mining companies," Mr Barnett said.The Resources Minister, Martin Ferguson, had earlier ridiculed Senator Brown's stand, saying the Greens leader was effectively just "jumping up and down on a soapbox" because in the end he was going to pass the new mining tax deal."You know we can all sit under the tree and weave baskets with no jobs if that's what some people in the NGOs [non-governmental organisations] and the Greens want," Mr Ferguson said.A spokesman for Fortescue Metals said it had been looking at a High Court challenge for months and would likely join another miner who launched one.News ReviewLenore Taylor on why Julia Gillard needs a carbon tax victory. Page 17Letters Page 20

© 2011 Sydney Morning Herald

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