Taxing time for port users

Western Australian port users have accused the State Government of milking port profits at the expense of investing in infrastructure amid national concerns on infrastructure bottlenecks.

Users want several taxes on ports to be abolished or reduced and claim excessive taxation is affecting the ability to maintain and expand infrastructure, as well as hurting the competitiveness of the state’s exports.

The call comes despite the State Government highlighting its own expenditure on WA ports during its past term, with promises of more to come during the next period. With Australia’s burgeoning trade deficit and continued strength in export markets, investment in infrastructure, particularly in ports, has become a key national issue.

The Federal Government last week established a special taskforce to investigate infrastructure bottlenecks impeding Australian exports.

Yet critics have claimed the inquiry is inadequate and will only heap blame on the states for a lack of investment. However, locally there is support for the theory.

Albany Port Users Group chairman and Great Southern grain and sheep farmer Ian Peacock said a big slice of port profitability was consumed mostly by state charges, with little reinvestment.

He pointed to Albany Port as a case in point.

The Albany Port Authority annual report shows it last year recorded a profit of $2.3 million, of which $653,000 was paid in income tax and $240,000 was paid in land tax and LTGE (local government tax equivalent).

“By the time you take away the input costs they have to borrow just to fund day-to-day up-keep,” he said.

While stamp duty and payroll taxes were not challengeable, he said, other ones, including land tax, a local government tax equivalent, a national tax equivalent and the state’s dividend, should be abolished or reduced.

“The dividend is the one that is really hurting,” Mr Peacock said.

The Gallop Government, he said, had adopted a short-sighted view by increasing the dividend rate from 30 per cent after-tax profit to 50 per cent.

“If ports were allowed to expand their functions as trade facilitators, the employment and other benefits that would go with that would boost government coffers far more than raiding the port authorities for a quick buck,” he said.

Mr Peacock said it wasn’t such an issue with the North West ports, which were booming as a result of the minerals trade. However, high taxes at southern ports were increasing charges, making agricultural exports uncompetitive, and hurting rural communities.

“Port dues on grain have increased 10 per cent and on wood chips by 15 per cent,” he told WA Business News.

Geraldton Port Users Group chairman Ron Jones said port users already pay very high port charges and a substantial amount of that money should be reinvested in their industry.

He said the group was particularly annoyed by the State Government claiming credit for the recent $103 million expansion of the port, which was simply a loan the Geraldton Port Authority must pay back.

Mr Jones said port users would pay $1.50 to $2 per tonne to the port until the loan was repaid in 20 to 30 years. This cost was in addition to standard port dues.

Port Hedland Port Authority chief executive Ian Hutton said that while 65 per cent of port profits that went to the state seemed excessive, it was much less than some interstate governments, as was the WA Government’s rate of return.

Port Hedland is the biggest and fastest growing port in Australia, dealing mainly with iron ore. Tonnage is expected to increase from 90 million tonnes up to 115 million tonnes this year.

However, as a result of the increased throughput, port charges will also increase.

The State Government did not respond in time to WA Business News calls however, in February WA Planning and Infrastructure Minister Alannah MacTiernan said the Government had allocated $420 million on strategic investment in its eight port authorities over the past four years, with a further $300 million committed over the next four years.