The Banana Republic has mounted its big, obnoxious mining truck and it’s bearing down on one poor sod in WA. From WA Today:
The Weekend West can reveal that of the $2.7 billion a year the tax would raise in one year, almost $1 billion will be pocketed by NSW under the way the GST is carved-up among the States and Territories.
Victorians would share up to $725 million raised from the tax on WA iron ore andthe ACT would get almost $50 million.
The Nationals’ official costings of the tax show it starting from January 1 next year. In its first full year it would raise $2.6 billion, all of which would swell the coffers of the State Budget.
But beyond that, part of the cash would result in lower GST to WA as part of the annual Commonwealth Grants Commission carve-up of the tax among the States.
In 2018-19, of the $2.7 billion that would come from the tax, $390 million would be lost from WA’s GST share. The following year almost half of all the mining tax revenue would move across the Nullarbor.
Ultimately about 88 per cent of the revenue would go, with the biggest proportion ending up in NSW. Before that, the State would collect $7.2 billion from a total tax take of $9.5 billion from the two big miners.
The Federal Government would find itself worse off under the Grylls’ proposal.
“This would equate to a $690 million reduction in company tax revenue (assuming a 30 per cent company tax rate),” the analysis said.
And? Although written from a perversely parochial viewpoint, this is an excellent outcome. The nation will collect a better share of the iron ore income it is being reamed on. Brendan Grylls is standing in for our missing prime minister.
WA and Australia is clearly not charging high enough royalties when BHP and RIO are operating on margins of 150%:
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:
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.
But no! Mining sedition is the order of the day. From Yahoo:
As Federal Labor confirmed its opposition to the iron ore impost, a poll for the Chamber of Minerals and Energy found an almost 20 percentage point fall in Mr Grylls’ primary support in the seat of Pilbara.
Pollster Utting Research found Mr Grylls had tumbled to just 19 per cent among respondents, with Labor recording 26 per cent, the Liberal Party 22 per cent and the Greens 12 per cent.
Most of the Nationals’ lost support is parked with “others”, which sits at 21 per cent.
This suggests the Liberals are on track to win Pilbara on March 17, winning 55 per cent of the vote against Labor’s 45 per cent in a two-party preferred split.
Labor’s Tom Stephens held Pilbara between 2005 and 2013, when Mr Grylls switched from his safe Central Wheatbelt seat.
The telephone poll, conducted over November 1-3 with 300 respondents, found more were opposed to the tax (50 per cent) than supported it (41 per cent) and while Mr Grylls was still regarded positively, BHP Billiton and Rio Tinto were rated higher among Pilbara respondents. Last night, the mining sector began a major television and newspaper campaign against the Grylls iron ore tax, which would apply only to BHP and Rio Tinto and generate $7.2 billion over four years.
The Federal Labor Party, itself once a target of a massive campaign by the big miners over a mining tax, has formally denounced Mr Grylls’ plan as a tax on jobs that would hurt WA.
Labor frontbencher Tim Hammond likened the Nationals leader to Republican presidential candidate Donald Trump, saying Mr Grylls appealed to populism but his policies did not bear scrutiny.
Writing inThe West Australian today, Mr Hammond said the $5-a-tonne levy was a tax on production that could kill new projects.
Where is the support for Grylls in the debate?
