A Western Australian government decision to increase mining royalties has enraged their Federal counterparts who claim the move will cost the state GST revenue.

The Opposition says the confrontation proves the mining tax deal is “dodgy”.

Ellen-Maree Elliot reports.


Western Australia predicts the increased royalties will bring an extra two billion dollars into the state’s economy.

Christian Porter, WA State Treasurer: “No mistake, Mr Speaker, this is the economic fight of the state’s life.”

Under the mining tax deal, the federal government promises to pay back royalties mining companies pay to state governments.

Tony Abbott, Leader of the Opposition: “This is almost going to destroy the forecast surplus.”

But the Federal treasurer says the $2-billion forecast is overly optimistic and the hike won’t affect the Federal Budget.

He says the state’s new policy surprised him.

Wayne Swan, Federal Treasurer: “Mr Barnett, I think is just basically kicked an own-goal.”

The government says Western Australia will be cut-off from GST revenue and infrastructure funding if they go ahead with their plan.

Wayne Swan, Federal Treasurer: “Western Australia is a loser from this.”

Mr Abbott says the federal budget’s surplus will go completely if Queensland or New South Wales make similar changes to their policies.

Tony Abbott, Leader of the Opposition: “It just goes to show what a dodgy deal the mining tax deal was.”

The Queensland Treasurer has ruled out changing mining royalties in the next budget saying he tackled this issue in 2008.

Andrew Fraser, Queensland Treasurer: “At the time all the coal companies said that would be the end of coal investment in Queensland, but as far as I can tell, that hasn’t turned out to be the case and they’ve continued to invest in Queensland.”

Mr Fraser will launch the state budget next month.

Ellen-Maree Elliot, QUT News.