Min­ing roy­al­ties plan to net $1b

Pilbara News - - Pilbara | News - Daniel Mercer

Quar­an­tin­ing one-quar­ter of all WA min­ing roy­al­ties from the an­nual GST dis­tri­bu­tion would de­liver al­most $1 bil­lion to WA over four years, un­der mod­el­ling by the State Gov­ern­ment.

Barely two weeks af­ter Aus­tralia’s chief min­ing lobby called for 25 per cent of WA’s min­eral roy­alty in­come to be ex­empt from GST cal­cu­la­tions, Premier Mark McGowan re­vealed he was look­ing at the pro­posal.

Trea­sury mod­el­ling showed the plan would yield $5.4 bil­lion in ex­tra money for WA over the next four years.

The fig­ure is al­most $1 bil­lion more than the $4.6 bil­lion that would be raised by quar­an­tin­ing just iron ore roy­al­ties, as pro­posed by Mr McGowan.

The Min­er­als Coun­cil of Aus­tralia has called for 25 per cent of all WA min­ing roy­al­ties to be set aside from the Com­mon­wealth Grants Com­mis­sion’s GST de­ter­mi­na­tion.

The ex­panded roy­alty ex­emp­tion would form part of the State’s sub­mis­sion to a Fed­eral re­view of the GST grants for­mula be­ing car­ried out by the Pro­duc­tiv­ity Com­mis­sion.

Mr McGowan said that while the State would be sat­is­fied with an ex­emp­tion for iron ore — which is by far WA’s most lucrative ex­port — the MCA pro­posal would also be pur­sued.

“As stated be­fore, it has been iron ore that has driven the un­prece­dented dis­tor­tion in the GST dis­tri­bu­tions and that’s why we see a 25 per cent dis­count on iron ore rev­enue as a good first step for WA,” he said.

“Of course, the MCA sug­ges­tion will de­liver even more fund­ing back to WA, and this is some­thing that we could work to­wards.”

Ac­cord­ing to Mr McGowan, the GST dis­tri­bu­tion sys­tem provided a per­verse in­cen­tive for other States to block min­eral de­vel­op­ment be­cause they de­rived much of the benefit from WA’s projects.

He said quar­an­tin­ing a por­tion of roy­al­ties, a model that ap­plied in Canada, was a fo­cus be­cause it was “an achiev­able and rea­son­able op­tion that can be im­ple­mented quickly”.

“No other rev­enue source has come any­where near iron ore when it comes to dis­tort­ing the carve-up of Com­mon­wealth pay­ments,” Mr McGowan said.

“Why shouldn’t Western Aus­tralians be as­sured of at least 25 per cent of the rev­enue from the iron ore projects stay­ing in our State? As it stands, if a State im­proves its econ­omy through bet­ter in­vest­ment, the ben­e­fits are ef­fec­tively trans­ferred to the other States.”

Un­der the lat­est dis­tri­bu­tion, WA will get back just 34¢ for ev­ery dol­lar of GST it gen­er­ates.

Pic­ture: Tom Zaun­mayr

Quar­an­tin­ing a por­tion of min­ing roy­al­ties was a fo­cus, Premier Mark McGowan says.

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