It’s time for more big mining sedition:
The mining industry has evoked the memory of crushing campaigns against Labor’s mining and carbon taxes in a bid to kill off support for a $5-a-tonne levy on BHP and Rio Tinto in Western Australia.
The Chamber of Minerals and Energy WA has launched an “information campaign” warning about about the economic threats posed by the extra tax.
It has established a website called “Keep WA Mining Strong”, which details how much tax the miners already pay and invites visitors to click through to a form letter which is then emailed to the person’s local MP.
“The economic and community contribution from the iron ore industry is under threat from WA Nationals Leader Brendon Grylls, who wants to impose a new $5-a-tonne mining tax that will threaten jobs and investment,” the website says.
I would tread carefully if I were them. It appears the Grylls campaign is behind a surge in polling for Colin Barnett:
The West Australian election in March appears set to be a cliffhanger, with the latest Newspoll showing Premier Colin Barnett’s eight-year-old government gaining ground on Labor, despite recent leadership turmoil and a faltering state economy.
The Barnett government has improved its standing in Newspoll for the first time since being re-elected in 2013. The rise comes after the unpopular Premier survived a Liberal Party leadership spill motion in September.
The survey of West Australian voters, conducted for The Australian during the past three months, shows Labor’s two-party lead of 54 per cent to 46 per cent over the Liberal-National government has been cut to 52-48 per cent.
The social mood right now is very different to 2010 when the Minerals Council engineered a national coup. People are angry after years of falling incomes, especially in WA, and the miners will risk a boil over if they turn this into a simple big business versus people power fight. Moreover:
The closeness of the election means WA Nationals leader Brendon Grylls — armed with a policy of slugging iron ore miners BHP Billiton and Rio Tinto with higher taxes — could again be the kingmaker of state politics immediately following the March 11 poll. While both Mr Barnett and Mr McGowan have opposed his tax policy, Mr Grylls would almost certainly make it a condition of supporting a minority government, as he did with his Royalties for Regions scheme after the 2008 election.
That could actually deliver the right outcome. WA is clearly not charging high enough royalties when BHP and RIO are operating on margins well north of 100%:
These are super profits and the people of Australia are being reamed for the privilege of developing their dirt. Remember that this is a non-renewing natural resource owned by the people of WA. It’s depleting nature needs to be reflected in the revenue being received by them.
But, this debate is about equity and investment. First, the Australian people should be getting more. Second, the amount should be calibrated so that BHP’s and RIO’s competitiveness is not adversely impacted causing them to lose volumes (and investment). That level is more like $2.50 per tonne than the $5 which would put them on par with Vale, from UBS:
Having Grylls negotiating with majority partner in government would allow the $5 to negotiated down to the more appropriate $2.50 level.
I would like to see Mr Grylls also commit to paying down debt with the windfall (or invest it strictly in infrastructure or an SWF). If the debate is about equity over generations then the revenue should be accordingly distributed over time.
