Mr SWAN (Lilley—Deputy Prime Minister and Treasurer) (14:08): I thank the shadow Treasurer for his question, because we have had a humiliating backdown from the Western Australian Premier today—he has been forced to admit that he knew that if he took this decision to increase royalties then it would be withdrawn by the independent Grants Commission. He has finally admitted that today. He has also put some correspondence in circulation which goes back almost 13 months—13 months ago he did raise the question of fines but in the 13 months since then he has not discussed the matter with me. It is a matter he has not discussed, but he did put that in a letter—no doubt about that. But he did not say that he was moving to put it in that budget then or in a subsequent budget, because he made that announcement before the budget before last. So what the Western Australian Premier has conceded today is that he went ahead with a royalty increase knowing that that would most probably result in less revenue for the people of Western Australia. And what that demonstrates is that he is all about politics, not about the benefit to Western Australians, not about investing in infrastructure in Western Australia. So the Western Australian Premier has kicked an own goal. He has increased his royalties but the money is going to be withdrawn, as he knew—as he indicated in that letter—it would be withdrawn. The proof of all of this is an article by Michael Pascoe that appeared in the press on the weekend. He talks about going to Western Australia about a year ago and he says he was talking to Norman Moore, the longest serving MP in that government, and Mr Moore looked him straight in the eye and said to him there was little point lifting royalties as the Commonwealth Grants Commission process would immediately take the revenue away. So the whole time they knew that if they lifted their royalties it would be withdrawn by the independent Grants Commission. They knew that and despite that they went ahead and lifted royalties in this budget—not in the budget before this, not one year ago. So he knew, as is shown by correspondence that was sent in his own name to the Treasury. Mr Hockey: Mr Speaker, on a point of order that goes to relevance: I ask the Treasurer whether he stands by his own words. The SPEAKER: The Treasurer will directly relate his remarks to the question. Mr SWAN: I certainly do; I do stand by what I have said about this matter. The fact is this: the Western Australian Premier has kicked an own goal. He has increased his royalties knowing that they would be withdrawn, knowing that was the case, having mentioned that in correspondence and having had his ministers going around telling journalists that that would be the case—and he did not proceed in the budget before last. But suddenly out of the blue he comes forward last week and increases his royalties and then goes out and pretends that that revenue would not be withdrawn despite having admitted that in correspondence and despite having his ministers travel around telling journalists it would be withdrawn—despite all of that. This is the Premier of Western Australia who this time last year was claiming that mining companies were being taxed too heavily. And, of course, what does he do this year? He increases the taxation of mining companies and he does it in such a way that it makes it difficult for further investment to take place in infrastructure in Western Australia. So what we have is an own goal from the Western Australian Premier and he is also carrying on about this because he knows his budget figures are bodgy, based on exchange rate assumptions which mean that his budget figures are wrong—not just this year but for the rest of the forward estimates.