It also joins Western Australia and Victoria in a resounding under-estimation of the Commonwealth's taxation power.

And taxation lawyers will have a field day before too long.

The three conservative governments are playing on the letter of the law on the new federal mining tax.

That tax allows iron-ore and coal producers to deduct state mining royalties from their federal tax liabilities.

The understanding was that that meant existing state royalties, but the three new conservative governments have obviously thought that it meant open slather for them to increase royalties and their revenue at the expense of federal revenues, and for it to be neutral for the miners.

The feds and the miners do not see it that way.

The miners see the increased royalties - perhaps as much as $3 billion a year - as an extra impost because they - probably correctly - think that the feds will not allow the states to get away with it and that their deductions for state royalties will be pegged.

In any event, Queensland is quite wrong to assert that its extra royalties will not harm miners because they will simply come off the miners' federal tax bill. Some miners will not have any federal tax bill to offset the new royalties against. The federal tax does not apply to smaller miners, and others will have deducted the totality of their federal tax liability already. The new Queensland royalties will apply to every tonne of coal extracted whatever the federal tax position of the miner.

The miners have themselves to blame. Nearly two years ago, they should have seen that when the Henry tax review was made public the proposed federal mining resources rent tax was a far superior tax creature than state royalties. They should have accepted it at the time and just negotiated the details, rather than launch a massive scare campaign against the whole thing and the Labor government that proposed it.

The state royalty regime is a blunt instrument.

It imposes a tax on the volume of ore mined, irrespective of the cost to mine it and with scant attention to the price achieved for it.

The federal regime, on the other hand, allows deductions for costs of production, and is more generous in deductions for depreciation and for other taxes and costs paid. It is a more subtle and more complex tax, but is fairer and more economically efficient.

State royalty regimes discourage risky and marginal mining ventures because miners get hit with the tax irrespective of production costs. State royalties can make an economic mine an uneconomic one in a way that the federal tax cannot.

The federal tax's maximum impact is only to reduce mega profits to merely large ones.

Marginal and risky mines that do not end up doing well, do not reach the threshold for the federal tax to apply. If they do get there, it means their risky marginal venture has done extremely well and they should be happy to pay tax anyway.

The risky and marginal ventures cruelled by the new conservative state governments are the very ones that conservative governments are supposed to support - entrepreneurial spirit and all that.

The hypocrisy of the Liberal National Queensland government is manifest. In opposition it whinged loudly about higher taxes and how important the resources industries were to the Queensland economy. But once in office, it imposed higher job-destroying royalties.

When dealing with complex policy areas - like how to share Australia's mining wealth - it is too easy to shout simplistic slogans. Opposition Leader Tony Abbott was right to call the new federal tax ''a great big tax'', but he failed to point out it was a great big tax that replaced venture-stultifying, job-threatening royalty regimes and that it was a great big tax on great big profits that Australians outside the mining sector had a right to share.

At present, federal tax law most likely will allow miners to deduct the new state royalties from the their federal tax obligations, but expect a fight.

It might take new legislation, in which case, expect the Commonwealth to draw upon constitutional history which the present ruck of conservative state governments have obviously not learned.

In the 1940s uniform-tax cases the High Court interpreted the Commonwealth's tax powers very broadly - especially income tax.

In effect, the court said the constitution permitted the Commonwealth to impose income tax at whatever rate it likes - even 100 per cent. It could also insist Commonwealth taxes are paid first. It could also take over state taxing bureaucracies.

Taken together, the result was that there was no room for a state income tax. If it could be done for income tax, it can be done for mining taxes.

The simple constitutional point is that the states can only tax what the Commonwealth leaves for them to tax. Of course, politically it might be difficult for the Commonwealth to impose its will, but the power is there.

Moreover, a simpler way to deal with hypocritical state governments that bleat about job-destroying tax regimes and then impose higher taxes themselves, is to withdraw an equivalent amount from federal grants to the states, many of which are discretionary and can be changed without legislation.

IT'S A familiar story - instructions for a consumer product laced with so many warnings that it is difficult to find how to use the thing.

The other day I bought a scuba-diving air-compressor - admittedly a more risky product than most.

Nonetheless, after dozens of multi-language pages in fine print full of warnings, there were no actual instructions.

Surely, warnings without instructions is more dangerous than having instructions with no warnings.

The German section had more ''Actung''s than a B-grade war movie.

This stuff has built up after decades of court cases demanding that consumers of goods and services must be warned about risks or the provider will be held liable.

But a lot of this law is now evolving in a more reasonable way.

I am awaiting the case that says if a manufacturer or service provider obliterates or confuses with too many warnings, they will be liable for any catastrophic results.

Then we might get some sensible, clear instructions on how to use the things we buy.

crispinhull.com.au