Western Australia's Chamber of Minerals and Energy has hit back at Premier Colin Barnett's jibe that WA miners were "under-taxed", and called for urgent consultation with industry before any move to hike royalty rates.
Western Australia's Chamber of Minerals and Energy has hit back at Premier Colin Barnett's claim that WA miners were "under-taxed", and called for urgent consultation with industry before any move to hike royalty rates.
The premier, who has flagged the possibility that mining royalties would be lifted in the May budget to boost the state's ailing finances, yesterday told Parliament that even people within the industry believed "mining companies are getting away with murder, they're not paying enough".
But chamber chief executive Reg Howard-Smith said such comments were way off the mark, and warned that "ad-hoc" moves to impose further financial burdens on WA miners could threaten future investment in the sector.
"Suggestions that the sector is under taxed or has not paid its way are simply wrong," he said, adding that annual state government revenue from royalties had climbed by $2 billion to $3.2 billion over the past five years.
Furthermore, the sector also contributed significantly more at both the state and federal level through other direct and indirect measures, such as the $40 million annual mine safety levy recently imposed by the WA government, he said.
The random imposition of new charges and potential changes to long-standing obligations without first consulting industry potentially posed a real threat to future sector investment, Mr Howard-Smith said.
"We are greatly concerned about an ad-hoc and cost burden approach on the resources sector, particularly in the absence of any consultation or impact assessment by government," he said.
"This government runs a real risk of increasing cost imposts on the resources sector
to the point of damaging investment decisions.
"Industry is concerned that for the state government to proceed on a matter like this
without industry consultation could undermine the confidence in the state's ability to
create a stable investment environment, critical for multi-billion dollar investment
decisions."
Raising royalties unilaterally could also affect the viability of some sectors of the industry, and jeopardise existing and future jobs in those areas, he said.
Mr Howard-Smith said the premier should instead focus on his commitment to keep "a
tight rein on the state's finances and focus on delivering services more efficiently,
effectively - rather than to add further cost burdens on industry,".
Opposition state development spokesman Mark McGowan was scathing of the premier's "arrogant" approach to the issue, which he said would have a devastating impact on the industry.
"Changing royalties unilaterally ... would put people out of work and companies out of business," he said.
Furthermore, the premier's apparent refusal to consult with the industry about possible changes to royalty rates was "abhorrent" and was a reflection of government mismanagement, he said.
"If he changes royalty rates, then that is a reflection of his government's poor financial performance," Mr McGowan said.
Mr McGowan said the only changes that could be supported were the removal of concessional rates on iron ore royalties granted to BHP and Rio Tinto decades ago to encourage the development of critical town and transport infrastructure.
The concessional rates, which do not apply to other miners or new operations in the Pilbara, were to be phased out under an agreement first struck by the previous Carpenter Labor government.
The removal of the concessions will see all BHP and Rio Tinto operations pay the same 5.625 per cent royalty on revenue as the rest of the industry, up from 3.75 per cent, generating hundreds of millions of dollars in extra royalty revenue annually.
In a further development, a newly-formed group representing a significant portion of WA's gold production today invited the premier to meet with industry before further increasing gold royalties.
Gold Royalties Response Group spokesman Warrick Hazeldine said the group hoped to better inform the premier about the major contribution gold miners made to regional communities and the significant issues already facing the sector.
