by Chris Becker
This is not funny – from ABC News:
West Australian Treasurer Mike Nahan says the plunge in iron ore prices is getting to the point of serious concern, after it slid below $US80 a tonne.
The benchmark price hit a fresh five-year low of $79.80 overnight, after the Chinese government indicated it was unlikely to implement an aggressive stimulus policy to prop-up construction.
It is more than $40 less than the figure WA Treasury used to calculate expected revenue for this financial year, which has led to a state budget hole in excess of $1.5 billion.
Dr Nahan said he never imagined the price would fall so low.
“No-one predicted anywhere near this slide, I certainly didn’t, and it’s actually having ramifications across the stock exchange with iron ore miners declining and other things,” he said.
“So it’s getting to the point of real worry.”
Iron ore royalties account for 20 per cent of WA’s income.
There’s 3 obvious problems with this:
- Having a major part of your income tied to one speculative commodity price without hedging/saving for the future
- Having a forecast that is out by 50% due to a lack of imagination – how about using some intelligence next time?
- Having the gall to spread the bullshit that “no-one predicted this slide”. They don’t have the internet in Perth?
Time to resign, Mr Nahan.
You cocked-up big time and the rest of the country will now pay for your budgetary black hole.