Nationals WA leader Brendon Grylls is misleading the public through his dogged pursuit of a discriminatory tax on two of Western Australia’s biggest economic contributors.
In targeting BHP Billiton and Rio Tinto, Mr Grylls has failed to tell the public of all the taxes and charges paid by the companies to local, State and Federal governments.
Mr Grylls’ rhetoric implies BHP Billiton and Rio Tinto only pay a production rental of 25 cents per tonne.
The true position is in addition to the usual taxes, charges and levies paid by every business, mining companies pay royalties to the State Government, which differ depending on the commodity. In the case of iron ore, the royalty paid to the State is 7.5 per cent of the value of each tonne of iron ore. In addition to the royalty payment, all iron ore producers big and small are also obliged to pay a 25 cent per tonne additional rental payment 15 years after mining commences.
While Mr Grylls has been referring to the “very substantial margins” being made by the companies, he is selectively ignoring the taxes and royalties paid, interest on borrowings, exploration costs and the capital cost spent each year to maintain the businesses. The true cost of exporting iron ore to China is significantly more than the costs Mr Grylls is erroneously quoting.
In 2014/2015, 90 per cent of the $1.1 billion budgeted for the Royalties for Regions program came from the iron ore sector.
These iron ore royalties have enabled Royalties for Regions to support health services in all the regions with the Karratha and Carnarvon Health Campuses and Busselton and Esperance Hospitals receiving funds for redevelopment and a significant investment in the Southern Inland Health initiative.
In the metropolitan area, in addition to the royalties paid, the iron ore companies are supporting better health services by contributing $350 million to the new Perth Children’s Hospital.
The Australian Taxation Office’s 2015 corporate tax transparency report found BHP Billiton and Rio Tinto paid the two largest sums of company tax during 2013/14. This is for the benefit of all Australians.
Western Australia has enjoyed a strong and prosperous resources industry for decades with State Agreements in place. Companies have invested in the state, delivering jobs, infrastructure and community facilities.
If Mr Grylls thinks his tax will not affect these two companies ability to continue to deliver benefits to all West Australians, then he is kidding himself.