INDEPENDENT MP Rob Oakeshott has thrown down the challenge to commonwealth and state treasurers to sort out the issue of mining tax and royalties, and put politics "in the back pocket".
An independent inquiry has called for an overhaul of the mining and petroleum taxes to remove incentive for states to increase their royalties.
The inquiry's report, by former premiers Nick Greiner and John Brumby and tax expert Bruce Carter, was released on Friday.
It found the federal government's decision to fully credit state royalties under the minerals resource rent tax (MRRT) and petroleum resource rent tax (PRRT) had created an incentive for states to boost royalties, which was neither "desirable nor sustainable".
Mr Oakeshott said it was crucial the treasurers came together and talked about the issue in a sensible way.
"Put the politics in the back pocket and think of the nation's interest as far as our standing of living for the future," Mr Oakeshott told reporters in Canberra.
He said if it can't be resolved, the MRRT legislation should be brought to close up the loophole that allows a "feeding frenzy" for Western Australia and Queensland on their royalties, which in turn reduces the commonwealth's revenue base.
However, he was suspicious of anything being delivered given the report was "dumped" on a Friday afternoon just weeks before Christmas.
But he said the substance of the report was good and vindicated everything that many people had been saying all year about tax reform.
"It's the latest example of where the two major parties must now take tax reform seriously," Mr Oakeshott said.
He said earlier this week the Organisation for Economic Cooperation and Development had told Australia it must tackle taxation reform or see the start of material damage to the economy, and Treasury secretary Martin Parkinson had made similar remarks about superannuation reform.
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