Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Wong. Given that the Australian Greens have a bill before the parliament to close the state royalties loophole in the mining tax, and given that the Treasurer wrote to the states in August, warning the states not to increase royalties or the government would dock the states the same amount of federal funding, can the minister inform the Senate of the states' response to the Treasurer's letter and, in particular, whether the government has actually docked any funding? If not, how much are the state royalty increases costing the federal budget?

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

I think I was asked a very similar question to this, although possibly from a different angle, by Senator—

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

You didn't answer it then, either.

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

We were getting along so well. I was asked a similar question, I think, during the last sitting week by Senator Cormann. In relation to Senator Milne's question, I would remind her of a number of issues. The first is that the government has established a GST review panel, which has considered the distribution arrangements for the GST. That panel comprises former premiers Greiner and Brumby and Mr Bruce Carter. That panel has provided its report to government and the government is considering it. The panel was asked to look at, amongst other things, how there could be a disincentive or how to remove the incentive for states to increase royalties. In relation to royalties, as I think I have made clear to the chamber previously, the design of the MRRT, which includes the fact that royalties are able to be credited, has been factored into the budget bottom line. I think I answered on a previous occasion that we have referenced the recent Queensland royalty hikes in our assumptions as to MRRT revenue. I also have answered, in response to the New South Wales royalty increase, given there was no detail on that and that it is an aspirational revenue target without basic details, that that has not been calculated. (Time expired)

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. It is clear that the government has not docked any of the funding to date. Is the minister aware that in 2016-17 the Greens' amendments to the MRRT would include fixing the royalty mistake and increasing the rate to 40 per cent, and would bring in an additional $10 billion in that year alone, on top of the $26.2 billion additional over the forward estimates, making a total of $36.2 billion?

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

I cannot speak for the Greens' costings—that is a matter for the Greens. I can speak to what the government has made clear in the most recent budget update, which is that we have revised down the MRRT revenue take for the reason I outlined yesterday, which is primarily that commodity prices have fallen more sharply than we had previously anticipated. The government has its position as to the design of the MRRT that reflects an agreement that the government has put in place. Obviously, the issue of royalties is being dealt with through the process which I have outlined. In terms of the Greens' policies, that is a matter really for the Greens and not for the government.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Mr President, before I ask a further supplementary question, I seek leave to table the costings from the Parliamentary Budget Office showing that $36.2 billion could be achieved over that five-year period.

Leave granted.

Thank you. I ask the minister: does this $32.6 billion that is available confirm that there are ways to reform the Australian tax system to increase revenue for the benefit of all Australians that do not involve increasing the GST?

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

In relation to the GST, the government has had a consistent position that we will not be extending the base nor increasing the rate. I note that the opposition has had a number of positions on this, including the shadow Treasurer geeing on the premiers to argue for it but I understand he may have been pulled into line more recently, given his public comments.

That is the position of the government. We understand that you have to have a sensible approach to policy in terms of the tax system. That is why we have undertaken reforms, such as the changes to the tax-free threshold, which are beneficial to second income earners particularly and will increase participation. That is why we have put in place policies such as loss carryback, which is designed to particularly help small business. These are the sorts of tax reforms the government is committed to.