Tension is mounting surrounding the federal government's minerals resource rent tax legislation, with key independent MPs demanding stricter rules for coal seam gas and the Greens insisting gold miners also pay the levy.
Treasurer Wayne Swan will tomorrow table a package of 10 bills that aims to introduce a 30 per cent tax on the extraordinary profits of coal and iron ore miners from July 1, 2012.
Revenue from the tax will be used to fund a cut in the corporate tax rate, an increase in compulsory superannuation contributions, and improve regional infrastructure.
The government has yet to win over key independent MPs to support the tax, with two of them demanding stricter rules for coal seam gas proposals on farmland.
Independent Tony Windsor is insisting his support for the tax will come with strings attached.
The MP wants up to $400 million a year set aside from the tax revenue to fund bio-regional assessments which would scientifically gauge the impact of coal seam gas and other mining practices on farmland.
As well, he wants greater commonwealth powers over mining projects approvals, now the domain of states and territories.
Farmers on the Liverpool Plains, in Mr Windsor's northern NSW electorate of New England, are engaged in a running battle with mining companies over proposals for coal and CSG projects.
Another independent MP, Rob Oakeshott, is making similar demands of the government.
On another front, the Australian Greens are insisting gold miners be subject to the new tax.
Prime Minister Julia Gillard says she is prepared to discuss Mr Windsor's concerns with the MP.
But it is unlikely the government will agree on greater commonwealth powers to override mining project approvals.
"Predominantly this is a state government matter to manage land use and resources," Ms Gillard said.
A meeting of the Labor caucus today discussed the issue of coal seam gas projects but did not come to any decision.
The Australian Petroleum Production and Exploration Association said any regulatory decision driven by pure politics resulted in bad policy, setting a dangerous precedent and potentially harming the economy.
APPEA’s chief operating officer for eastern Australia, Rick Wilkinson, said Mr Windsor’s decision to make his support for the tax contingent on regulation of the resources industry only created more uncertainty.
“Australia cannot afford such a tail-wags-dog policy, which will clearly have serious economic and energy security consequences.
“It will hurt jobs, small business, and investor confidence for only local political advantage.
“Mr Windsor is demanding changes to the regulation of the gas industry which overturn good practice and ignores the fact that current legislation already provides state and federal oversight.
“Already one third of Eastern Australia’s natural gas comes from coal seam gas which has been developed safely and responsibly under this oversight.
“He also ignores that CSG in Australia is more heavily regulated than the uranium industry and that Queensland’s three LNG projects (worth $46 billion) required environmental impact statements that took more than two years to complete, that each ran beyond 10,000 pages, and had 1,500 environmental conditions attached to their approval. They also gauged the potential impact of proposed gas projects on aquifers, native vegetation, and native species.
“If Mr Windsor was serious about the Great Artesian Basin then he would be calling for a complete review, including agriculture, which accounts for 83% of water taken from the Great Artesian Basin.
“Rather than demanding policy that further erodes Australia’s reputation as an investment destination, Mr Windsor would be better served supporting the Commonwealth’s work with state and territory ministers through the Standing Council on Energy and Resources to help develop a harmonised approach to regulation and issues relating to co-existence, best practice standards, land access and water management.”