May as well leave minerals in the ground, Barnett says

Western Australia may as well leave the minerals in the ground as along as the eastern states ‘steal’ its GST revenues, premier Colin Barnett says.

Barnett warned that the rate of mining growth may slow in WA after this current cycle and the state may be penalised, according to the SMH.

These comments are just the latest in a string of complaints over Western Australia’s share of revenues.

Last year, Barnett said the state had been threatened with GST funding cuts by the Federal Government if WA didn’t halt mining royalty increases.

The government threatened to cut GST and infrastructure funding to the state, claiming it is serving its “own goal”.

The state stands to lose out on $2 billion from raised royalty rates on iron ore miners, Swan’s plans to share the resource profits with other states.

Previously, business groups called on Treasurer Christian Porter to make cutting payroll tax his top priority to increase job creation.

It said that under the Commonwealth Grants Commission rules, Australia’s biggest mining state will probably end up with less revenue.

In a letter to the federal treasury dated May 10, 2010, Marney states the government’s intention of removing the royalty concession on iron ore fines and seeks assurance from the Gillard government that it would direct the CGC not to reclassify iron ore “fines” from a low to high-grade mineral.

He said if the mineral was reclassified, it would reduce the state’s "GST by more than the additional; royalty revenue we would collect".

Barnett has called for a base of 75 cents in the dollar for the state.

Speaking to Fairfax Radio on Wednesday he said the lack of GST revenues is threatening the development or regional and rural areas.

The premier explained that his government had been encouraging development in these regions but it was stymied by "Canberra and the east coast states stealing money from Western Australia and spreading it amongst themselves.
"For Western Australia, the logical thing would be to leave the minerals in the ground," Barnett said.

"The rate of mineral growth after this cycle of projects may not be so great."

He went on to say that funding for new towns and developments, as well as social infrastructure, would not be given.

"We’re not going to allow resource development to run away at such a pace, when all the money goes to Canberra and we haven’t got the capacity to match that economic development with social development," the premier said.

"I’m not going to stop approval of projects but the pace of development will not be a runaway train in this state."

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