Treasurer Wayne Swan has described as a "lot of common sense" a report into the federal government's planned minerals resources rent tax (MRRT).
But he is refusing to endorse or reject any of the 94 recommendations included in the report, given to the government on Tuesday by the policy transition group.
"But I can say this - there is a lot of commonsense in this report, a lot of common sense in these recommendations," Mr Swan told reporters in Canberra.
Further conversations were needed with cabinet colleagues "first and foremost" but also with the resources sector and the states before the government responded formally to the report.
The group has recommended that all current and future state and territory royalties be credited against tax liabilities.
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The recommendation contradicts the government's stance to limit credits to only royalties existing at May 2, 2010. The group said a full credit for royalties would provide certainty about the overall tax impost on the coal and iron ore industries.
But it warned the MRRT should not be used as a mechanism to enable states and territories to increase inefficient royalties on taxable commodities.
Mr Swan said any decision on the treatment of royalties would go through the usual cabinet processes.
"We've made the point all the way through this that we can't give a green light to the states to increase royalties endlessly," he said. "Nobody wants to tilt the balance from a profit-based tax towards inefficient royalties.
"That wouldn't be in the interests of our country and it certainly wouldn't be in the interests of industry."
The policy transition group said the government needed to put in place arrangements to limit incentives for the states to increase royalties over time.
