OECD report stinging rebuke of govt: Robb

Opposition finance spokesman Andrew Robb believes the federal government is in the
"very dangerous" situation of losing the confidence of Treasury.
Responding to an assessment of the Australian economy by the Organisation for
Economic Cooperation and Development (OECD), Mr Robb said much of the information in
the report would have been gleaned from Treasury, and was a "stinging rebuke" of the
government's pet policies.
While the OECD gave an upbeat appraisal of the economy, it questioned the design of
the government's planned mining tax, and the $43 billion cost of the national
broadband network and its impact on competition.
"It is quite an extraordinary situation. I have never seen a report which is so
stinging in its rebuttal of so much of what a government is doing," Mr Robb told ABC
television on Monday.
"The government in many ways ... has lost the confidence of the Treasury. It is a
very dangerous situation," he said.
While the OECD thought the planned minerals resource rent tax (MRRT) was justified,
it believed its rate of 30 per cent was too low and recommended putting revenue in a
reserve fund.
The Australian Greens agree with the OECD's recommendations, making it tricky for
the government to get the tax endorsed by parliament.
But Treasurer Wayne Swan said the government is going to stick with the agreement it
negotiated with three of the nation's biggest miners - BHP Billiton, Rio Tinto and
Xstrata.
"We will fight for this in the parliament because it is good for the economy," he
told ABC Radio on Monday.
While accepting there had been some criticism from the OECD, Mr Swan said there was
overwhelming support for what the government was doing.
The team tasked with implementing the MRRT will hold its final face-to-face meeting
with the mining industry in Melbourne on Friday.
Resources Minister Martin Ferguson said the Policy Transition Group's series of
meetings across the country had gone well, and that the government had no intention
of changing the proposal's make-up.
The group will consider a range of submissions prior to releasing a report to the
treasurer before Christmas, after which the government would release a draft in the
New Year, allowing industry a further opportunity to act and comment.
He noted that since the MRRT tax was announced on July 2, there had been a series of
major announcements regarding pipeline investment decisions in the resource sector.
"Industry understands the nature of the taxation arrangements," Mr Ferguson told
parliament.
"I can also assure the house there is no intention by the government to change those
announcements from what was agreed with industry because that in turn has been a
facility which enabled investment to continue since July 2."
The OECD also urged widening the base of the GST and raising its rate from 10 per
cent, a recommendation that Mr Robb did not support, nor did Queensland Premier Anna
Bligh.
"Frankly I would be reticent to approve any increase in GST because that's the tax
that people pay most of the time and it's a tax on a lot of basic items," Ms Bligh
told reporters north of Brisbane.
"At this stage I don't see any reason to justify an increase in the GST."



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