PM won’t budge on mining

Prime Minister Julia Gillard has again refused to commit the government to footing the bill for increased state mining royalties.

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Mining giants BHP, Rio Tinto and Xstrata are considering walking away from a deal they negotiated with the government for the minerals resource rent tax.

The companies and government are wrangling over who will be exposed to potential increases to state mining royalties.

Gillard has told parliament it’s not the government’s intention to have state governments able to change royalty

arrangements in a way which means the federal government foots the bill.

She says the issue is being worked through, in a parliamentary session otherwise dominated by Joe Hockey’s comments on interest rates.

Abbott hits out over ‘backflip’

Earlier, Opposition Leader Tony Abbott hit out at the government for walking away from its deal with the big miners.

“Plainly this is a government which said one thing before an election to try and win votes and is doing something quite different after an election,” Mr Abbott told reporters in Canberra.

“The problem the government has got is that if this mining tax unravels they are going to have enormous trouble to meet their further commitment to get back into surplus.”

The government insists it is not walking away from the deal.

But Mr Abbott said Rio Tinto’s iron ore boss Sam Walsh had questioned the government’s integrity by saying “if you can’t trust the government, who can you trust?”

“This is the problem with the Gillard government,” he said.

“You couldn’t trust the government on carbon tax, you couldn’t trust the government on detention centres.

“Now it’s pretty obvious you can’t trust the government on the mining tax.”