Mr IAN MACFARLANE (2:38 PM) —My question is to the Prime Minister. Did the Prime Minister, or any of her ministers, say to BHP Billiton, Rio Tinto or Xstrata representatives during negotiations on the minerals resource rent tax that all state and territory royalties will be creditable against the resource tax liability?

Ms GILLARD (Prime Minister) —I thank the member for his question and obviously his question arises from some publicity in today’s newspapers about the minerals resource rent tax. On the direct matter that he raises, I can advise that the Policy Transition Group, which the relevant minister is attending and which is being led by Don Argus, is working its way through a number of issues. That is exactly what it is there for. We have said all along we will credit existing royalties and scheduled increases and the Policy Transition Group will advise on the best way to do that to provide certainty to the industry. Obviously, in implementing the minerals resource rent tax it just makes commonsense that we not give a green light to state and territory governments to increase royalties, with us effectively footing the bill. I would take this opportunity to remind the member—and it is something that ultimately the opposition in this place is going to have to exercise its votes on—that the proceeds of the minerals resource rent tax are going to expand the productive capacity—

The SPEAKER —Order! The member for Groom will resume his seat. The Prime Minister must directly relate her remarks to the question.

Ms GILLARD —On the question the member has asked me, I have indicated what the answer is and I am simply asking the member and the opposition to also look at the other side of the equation: the reductions in company tax, the growth in national savings and the infrastructure.

Mr ABBOTT —Mr Speaker, I ask a supplementary question. Given that in light of the Prime Minister’s answer there is a clear difference of understanding between the government and the mining companies over this matter, I ask: why did she dud the mining industry over this matter?

The SPEAKER —Order! That is argument and, as I said yesterday, I will be ruling those types of question out of order and will not be offering the ability to reword.