JULIA Gillard has signalled the government will not back down in response to the latest mining industry anger over compensation for increases in state royalties.
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Mining companies including BHP Billiton and Xstrata this week accused the government of reneging on a deal to reimburse them for future increases in state royalties, which they say was agreed to in negotiations on the revised mining tax. The miners say they had reached an agreement under which the government would compensate them for any unscheduled future increases in state royalties.
But the Prime Minister yesterday made it clear Canberra would not be writing the states a blank cheque by guaranteeing to refund miners all future royalty rises.
Amid threats BHP and other big miners would walk away from the deal with the government, Ms Gillard said compensation for state royalties was not on the negotiating table.
''We have said all along we'll credit existing royalties and scheduled increases and the policy transition group is going to advise government on the best way to provide certainty to the industry,'' she said.
''Now in implementing the minerals resource rent tax we obviously won't be giving a green light to state and territory governments to increase their royalties in a way which means the federal government effectively foots the bill.''
The government's July decision to revise the effective rate on its mining tax to 22.5 per cent sparked claims it had capitulated to a vocal campaign by the mining industry.
Government officials appearing before Senate estimates said the policy implementation group, led by Don Argus, had not yet decided what level of royalties would be refunded under the revised mining tax arrangement.
