BHP Billiton executive Mike Henry has launched a stinging attack on WA Nationals leader Brendon Grylls’ proposed mining tax, warning it is “punitive” and will cause job losses.
The warning is contained in a leaked internal email to staff in which Mr Henry, head of the company’s Australian minerals division, said the tax would impact on investment.
“It would also impact our suppliers, our ability to invest in other infrastructure and communities and our overall economic contribution to the country,” he said.
“We will continue to oppose it and to support ongoing policy stability.”
When Mr Grylls seized back the leadership of the WA Nationals from Terry Redman last month, he proposed a radical plan to impose a mining tax on the two biggest miners, BHP Billiton and Rio Tinto to help solve WA’s GST shortfall.
Under the plan, the current 25 cent a tonne production rental fee the companies pay on iron ore would be increased to $5 a tonne, raising an estimated $1.5 billion in revenue for the state.
The Liberals, who are in an alliance Government with the WA Nationals, oppose the tax, with Treasurer Mike Nahan labelling it “crazy brave”.
Tax ‘discriminatory’: mining chief
While he acknowledged Mr Grylls’ mining tax was just a proposal and one not supported by Labor or the Liberals, Mr Henry told staff the company had “every reason to be concerned”.
“A discriminatory tax like this, targeting two of the nation’s biggest employers and economic contributors, would be bad policy,” he said.
“The proposal suggests a lack of understanding of the facts and the damage such policy would trigger for industry, for WA and for the nation.”
Mr Henry appeared to suggest it was simplistic to focus on the 25 cent rental fee when the reality was that last financial year, WA iron ore’s total royalty and income tax contribution to the federal and state governments was $17.50 a tonne and it paid $1.33 billion in royalties alone.
He also argued that over the past decade the company had paid $10.6 billion in royalties to the WA Government.
“To put this in perspective, this would fund over 100 new schools and 10 new hospitals,” Mr Henry said.
“We pay our fair share in taxes and make other significant township infrastructure, housing, Indigenous development, social investment and training contributions each year.
“We have invested more than $1.5 billion over the past four years in the communities of Port Hedland and Newman.”
He said the proposed tax would result in BHP Billiton‘s costs increasing by an estimated $1.3 billion per year.
And in what appeared to be a direct dig at Mr Grylls, the member for the Pilbara, Mr Henry said policy stability had been essential to the company’s decision to invest more than $25 billion in the Pilbara in the past decade on new mines, infrastructure, ports, rail and technology.
“We look forward to continuing to work with Government and all stakeholders to ensure we remain competitive and that this successful legacy is continued,” he said.
Mr Grylls has mounted a simple case for his proposed tax, arguing the production rental fee had been unchanged for decades, and like everyone else, the big miners should have to pay increased taxes and charges.