Wednesday, 14 September 2016
Western Australia: Mining
I have resisted speaking about Brendon Grylls' proposed additional tax of $5 per tonne on BHP and Rio Tinto, and the reason why I have resisted is that, like many other commentators, I view it as nothing more than a thought bubble or perhaps just another media stunt—more attention seeking. Of course, those who know more about these things will tell you that, even if it was possible to tax these two large iron ore companies, there is no doubt that it would get caught up in the Grants Commission model, and the fact is that WA would not receive this extra revenue in any event.
I am talking about it now because I am starting to feel gravely concerned for the people who live in the Pilbara, the people who are employed by BHP and Rio. Let's face it; there have been a number of job losses in the Pilbara, and people are concerned about their jobs. They see this as just another axe hanging over their heads. It is for that reason that I now feel compelled to talk about this, given that both of those big companies are in my electorate of Durack.
I commend to the House an opinion piece by Reg Howard-Smith, who is Chief Executive of the CME of Western Australia. I will take a few quotes from that article, which appeared in the Financial Reviewtoday. He talks about Brendon Grylls' new tax of $5 and says:
His new tax would make WA the world's highest taxing iron ore jurisdiction—three times larger than Brazil, our biggest competitor.
Like any business which faces increasing costs, BHP Billiton and Rio Tinto will be forced to further reduce their overheads to offset the new cost as proposed by Grylls.
It will directly result in less employment and impact on the 845 WA businesses currently supplying goods and services to these two companies. These are the same businesses that supplied $10.9 billion worth of goods and services in 2014/2015.
BHP Billiton and Rio Tinto also provided $3.4 billion in iron ore royalty payments, including mining lease rentals, in 2014/2015 to Western Australia.
Mr Howard-Smith goes on further to say:
If Grylls was successful, Australia would become the highest taxed country in the world, giving a distinct competitive advantage to our global competitors.
I agree. He goes on:
Grylls might have you believe his way is the only way forward—clearly, he has had doubts about a mining tax before.
This is a reference to the resource super profits tax, which Grylls was opposed to. He continues:
The only difference now is he is looking for votes ahead of a state election in six months' time.
I could not have said it better.