Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

It is the case, I think, in this debate that we have been using the word 'creditable'—and I assume that the senator is referring to a question which was asked and answered in the other place yesterday—when in fact the technical term would be 'deductible allowance'. I can confirm that royalty credits are used by way of a deductible allowance; that is the way it operates in law. Obviously, in the course of the way in which royalties have been discussed in the context of the MRRT, various ministers and other players, including the industry, have referred to it as 'creditable'. But, in fact, the technical way in which this is administered under the MRRT and in tax returns is by way of a deductible allowance that reduces tax liability. So I trust that that is of assistance to the senator in terms of clarifying how these royalties work.

I would again make the point that I made yesterday: that the design of the tax, including the fact that state royalties can be deducted against MRRT liability, has of course been factored into the estimates, which were updated in the midyear review. Those reflect, as the senator has heard me say on a number of occasions now, a reduction in the revenue as a result of various parameters changing, including the fact that commodity prices have come off significantly since the budget. I think we had a discussion that, as a Western Australian, he should be aware of that. Obviously royalties do represent a cost to miners, and it is disappointing that we see the Liberal Party championing an additional cost to miners that is based on volume and not profit.