The Minerals Council of Australia has spoken out against a proposed $7.2 billion iron ore tax hike for Western Australia.
National Party leader Brendan Grylls wants mining giants BHP and Rio Tinto to pay a $5 per tonne tax, which would raise around $3 billion a year at the company’s current production rates.
ABS figures show that capex in the mining sector fell by 16 per cent in the June quarter on a seasonally adjusted basis, with the $10.7 billion expenditure the lowest it’s been since the December 2010 quarter.
The Minerals Council of Australia revealed the tax on Western Australia’s iron ore would make Australia the world’s highest taxing iron ore jurisdiction, according to a new study led by Dr Jack Mintz, the President’s Fellow at the School of Public Policy at the University of Calgary in Canada.
“The Grylls tax would represent a gold-plated gift to Australia’s iron ore competitors, most notably Brazil,” chief executive Brendan Pearson said.
“With iron ore accounting for 16 per cent of Australia’s export income, this tax would represent a massive self-inflicted wound on both the national and Western Australian economies.”
CMEWA chief executive Reg Howard-Smith said the new tax would hurt, not help Western Australian communities.
“Western Australia would officially become the least attractive destination for investment in the world,” he said.
“It would undo, in one fell swoop, the efforts of successive Western Australian governments of both political persuasions to develop the great iron ore province of the Pilbara.”
According to The Australian, Rio Tinto chief executive Jean-Sebastien Jacques called the iron tax hike “reckless”.
“The WA Nationals’ iron ore triple tax plan is self-defeating — it will ultimately lead to a smaller mining sector in WA, meaning fewer royalties, company payments and jobs,” Mr Jacques said.
“No other industry anywhere in the world would accept three major layers of taxation on one product.”
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