Australian federal gov't to return to surplus despite mining tax issues with Western Australia

15:38, May 27, 2011      

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Australian federal Assistant Treasurer Bill Shorten on Friday said he is confident the federal government will resolve the mining tax issue on royalty increases with Western Australia, and assured that the government will get the budget back to surplus in 2012/13.

The 30 percent minerals resource rent tax (MRRT) is due to operate from July 2012, and the government has earlier signed an agreement stating all royalties will be refunded under the new tax.

However, Western Australian Premier Colin Barnett announced to remove the concession on iron ore royalties under its state budget released last week.

In response to the move, the federal government has threatened to cut goods and services tax (GST) and infrastructure funding to Western Australia, and Shorten said he had no doubt that the commonwealth government will work through the issue with the Western Australian government and ensure the matter was resolved.

"On no less than eight occasions ... Premier Barnett made it terribly clear, right until weeks before the printing of the (WA) budget papers, that he wasn't going to increase the royalty on iron ore fines," Shorten told the National Press Club in Canberra on Friday.

Shorten reaffirmed that the federal government will get the budget into surplus in 2012/13, despite attack from the opposition over a potential 2.14 billion U.S. dollars hole in the federal budget, because of the decision by Barnett to lift mining iron ore royalties will end up with less mining tax revenue for the federal government.

Documents released by Treasury earlier showed the MRRT is forecast to earn 38.6 billion U.S. dollars for the federal government over 10 years time.

Source: Xinhua
 
 
     
 
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