Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, my question is to Senator Wong, the Minister representing the Treasurer. Can the minister confirm that, under Labor's special mining tax deal with the three biggest miners, the government will have to pay more than 10 per cent compound interest on any royalty credits which are accumulating while those miners do not pay any tax?

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

I am not in a position to give that level of detail.

An opposition senator: It is hardly a surprise.

Senator, you may be able to recall every aspect of every tax in detail, but I am not in a position to provide the particular detail which is being referred to. I am not sure if this was in the letter that I got some time ago. Maybe Senator Cormann can refer me to it. But, as I said to him at the time, it is still a question without notice. I am happy to take that on notice and see if I can provide any further details. Obviously the usual caveats would apply. We are not going to be disclosing the individual tax affairs of companies. That is obviously not appropriate for the government to do. I also make the more important point from the budget perspective that the design of the tax—

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

Mr President, on a point of order: the minister has already said she is taking the question on notice. That is fair enough. If she does not know the answer, it is the appropriate thing for her to do. But having indicated to the chamber that she has taken the question on notice, anything more is gratuitous commentary that just uses up question time.

John Hogg (President) Share this | Link to this | Hansard source

Order! There is no point of order. The minister has 51 seconds.

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

Thank you, Mr President. On being lectured by Senator Brandis on gratuitous commentary: I think even some of your side probably smiled at that.

George Brandis (Queensland, Liberal Party, Shadow Attorney-General) Share this | Link to this | Hansard source

I am never gratuitous.

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

I am afraid that I beg to differ.

John Hogg (President) Share this | Link to this | Hansard source

Order! These exchanges are disorderly.

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

And I suspect if we had a secret ballot we might have a few on the coalition side who might agree with me. Leaving that to one side, I will return to the issue.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

Mr President, on a point of order about the grounds of direct relevance: the minister is required to be directly relevant. She has said she does not know; therefore, she should sit down and we should move on.

John Hogg (President) Share this | Link to this | Hansard source

Order! I have ruled on this already. The minister was continuing the answer. The minister will address myself as the chair and has 26 seconds remaining.

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

Thank you, Mr President. The senator does not like a bit of fun in question time clearly. The point I was trying make was: whatever the design, details and behavioural assumptions behind this question, those would have been factored into the budget bottom line and the revised estimates for the take on the MRRT. So whatever he— (Time expired)

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I refer the minister to the 1½ pages of the minerals resource rent tax heads of agreement, signed by the Prime Minister, the Treasurer and the Minister for Resources and Energy, and the three managing directors of three big mining companies which says:

All State and Territory royalties will be creditable against the resources tax liability … Any royalties paid and not claimed as a credit will be carried forward at the uplift rate of LTBR plus 7 percent.

How come the Minister for Finance and Deregulation is not aware of the significant cost? (Time expired)

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

We have had a number of discussions about royalties, and I have made clear in terms of the midyear update that the design of the MRRT has been reflected in the estimates for that revenue line item. I have also made clear that the announced royalty changes by the Queensland government have been taken into account in the updated MRRT estimate and that the decision by the New South Wales government to increase royalties has not been included because specific policy details are yet to be announced. If there is any further information I can provide the senator with, I will do so, but he is on the side of advocating—I think from what he is asking me—for royalties as a good tax but not a profits based tax which was a bad tax.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given the minister is unaware how many royalty credits have been accumulated so far and how much compound interest on those royalty credits the government expects to accumulate, how can the government possibly estimate the net revenue it expects to collect from the mining tax over the forward estimates?

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

Senator, this was the answer I gave you in the first question which you clearly were not listening to. I made the point that, when Treasury considers and updates its estimates, it makes assumptions about how much revenue the tax will collect. It obviously applies the existing architecture of the tax and makes assumptions also about various other factors such as commodity prices and so forth

The whole point of the answer I was giving you is that those factors have been taken into account in the revised MRRT estimates, which of course do reflect a write-down because—surprise, surprise—as the senator should know, being a senator from Western Australia, commodity prices have come off significantly since the budget. When you are in a profit based tax regime, it is unsurprising that it will affect the revenue take.