Campbell Newman free balls it into Grylls levy

No idea, from the AFR:

The man who raised coal royalty rates in 2012, former Queensland premier Campbell Newman, believes the iron ore tax proposed by the WA National Party poses twice the sovereign risk threat that his royalty hike posed.

Mr Newman introduced a three-tiered royalty system for coal in Queensland, under which royalty rates fluctuate with coal prices.

The highest royalty rate under Mr Newman’s scheme, 15 per cent, has been triggered for the first time in the wake of the coal price rally, which looks set to ensure that average coal prices for the September and December quarters are above the trigger point of $US150 per tonne.

Mr Newman faced bitter opposition from mining companies when he introduced the royalty rise in 2012, but he told The Australian Financial Review that experience had not given him sympathy for WA National Party leader Brendon Grylls, who is trying to increase lease rental rates on each tonne of iron ore exported from WA from 25¢ to $5.

“What Mr Grylls is proposing is far more into the viability of operations and the decisions they [mining companies] made. I sense a far more heated argument coming from industry and I really hope it doesn’t happen because I don’t think it is going to be in the long-term interests of WA people.”

Mr Newman said the major difference between the royalty hike he engineered and the rental increase proposed by Mr Grylls was the sensitivity to commodity price fluctuations.

“I only rationalise what we did by the fact that it kicked in at the much higher levels and we thought that was a more reasonable way of doing it,” he said. “In terms of the scale of danger on this sovereign risk issue, I would personally rate what we did as a four out of 10 in terms of danger and I would rate what he is suggesting as an eight out of 10.”

If I was to rate Do-nothing Malcolm as a one out of ten then Campbell Newman would rate somewhere below that. Where’s your figures, Campbell? Where’s your facts? None and none.

Well…here they are. Pilbara mining margins are currently above 200%:

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 and Australia. It’s depleting nature needs to be reflected in the revenue being received by them and us. The tax take should be more like 80% (not kidding) such as it is in Norwegian oil.

As I’ve argued all along, $5 is too high for the levy given it would place the major’s break even costs alongside Vale:

So investment could be at risk in the long run. $2.50 per tonne is more reasonable. By the same token, Mr Grylls should 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.

Australian politics really has become a balls free zone.