WA Nationals’ mining tax plan poses sovereign risk issues, Minister says
The Nationals’ proposed tax increase on the two biggest iron ore miners would pose sovereign risk issues, WA’s State Development Minister says, as Labor continues to seek to drive a wedge between the two government alliance parties.
The Minister, Bill Marmion, said any changes to state agreements that were not made cooperatively would pose sovereign risk concerns, in response to questions about the Nationals’ proposal to increase the production levy on BHP Billiton and Rio Tinto.
New Nationals leader Brendon Grylls wants to impose a $5 per tonne iron ore production levy on BHP and Rio Tinto, a 20-fold increase on the existing level, but that proposal has been sharply rejected by the Liberals.
Premier Colin Barnett has already rejected the idea, with Mines and Petroleum Minister Sean L’Estrange saying it came at the worst possible time.
Asked if there was a sovereign risk associated with the Nationals proposal, Mr Marmion admitted there could be.
“Any change of state agreement acts [should be] done by cooperation with any proponent, so the proponent would have to agree to any change so there would be no disagreement,” Mr Marmion told Parliament.
“If we don’t do that, then there would be an impact on sovereign risk.”
Mr Grylls has repeatedly rejected criticism of the proposal, saying the rest of the community has faced increased charges amid the Government’s financial woes and major miners should not be exempt.
“I don’t believe the big mining companies should be protected by antiquated state agreements from having to do the same,” Mr Grylls said this week.
Labor’s state development spokesman Bill Johnston said the division within the Government was continuing to grow.
“It is clear you have chaos and dysfunction in this government, where you have ministers sitting next to each other and they won’t even give the same answers,” Mr Johnston said.
“The whole basis of development in Western Australia since World War II is through state agreements and if this policy goes ahead, it will completely up-end our security of investment.”