The Chamber of Minerals and Energy of WA Chief Executive (CME), Mr Reg Howard-Smith, called on the WA Nationals to make it clear that their $7.2 billion iron ore tax will destroy jobs in the regions and make Western Australian iron ore globally uncompetitive.
“At a time when the state is fighting for market share against other global iron ore producers like Brazil, Western Australia cannot afford a new mining tax,” Mr Howard-Smith said.
“Under the anti-mining plan by the WA Nationals, Western Australia will become the highest taxed iron ore mining jurisdiction in the world, potentially costing billions in investment and thousands of local jobs, particularly in regional areas.”
Major iron ore producers are already paying $17.00 per tonne in royalties and taxes to the State and Federal Governments. The claim by the WA Nationals that iron ore miners pay just 25 cents per tonne for iron ore production is wrong. Also contrary to the WA Nationals' claims, state agreements have been modernised including in the past five years when increased royalty payments were introduced.
A recent study by one of the world’s most respected analysts of international corporate tax regimes, Dr Jack Mintz (President’s Fellow at the School of Public Policy at the University of Calgary, Canada) proves the WA Nationals’ claim that the WA’s iron ore sector is lightly taxed is factually wrong.
The study finds the extra tax would mean Australia’s effective tax rate on iron ore would be three times larger than Brazil – the nation’s largest competitor. The study also finds WA already imposes the largest royalty burden in the world and the new tax would equate to an effective doubling of the overall royalty rate in WA on iron ore.
“While the mining sector is the largest economic driver in WA, the industry is no bottomless pit of funds. If doing business becomes too expensive then there is no doubt that companies will stop investing here to the detriment of thousands of families and businesses throughout Perth and regional WA,” Mr Howard-Smith said.
“There is no good reason for this tax to go ahead and it is too risky to play with one of the cornerstones of WA’s economic future in this way. What the industry needs is stability and constructive and productive policies to encourage investment and help generate jobs.
“In the past, the WA Nationals have stood against the introduction of unfair and unhelpful mining taxes on WA. CME is hoping they return to those previously-held principles and scrap this new mining tax.
“The WA Nationals have been prosecuting a deceitful campaign about WA iron ore. They should stop playing politics with the state's iron ore industry for the sake of the thousands of workers and suppliers who rely on the sector for their livelihoods.
The Mintz study can be accessed here.