WA gov not looking at increasing charges on miners

The WA state government is not considering raising taxes on mining companies despite Nationals leader Brendon Grylls’ push for $5 levy.

Grylls sought to increase the current 25 cent per tonne production rental fee to $5, aiming to raise $7.2 billion over four years to help fund the state’s budget deficit.

WA premier Colin Barnett said the government was in negotiations with BHP and Rio Tinto over the proposed increase, adding they were not looking to implement the $5 fee.

“We are just discussing the sort of timing of their payments and the like, but we can only have any change implemented if there is agreement between the companies and the state government, but we are not looking at increasing charges on the mining companies,” he said in a report by The West Australian.

Barnett said there were discussions over whether the 25 cent fee – which has been around since the 1960s – was appropriate, saying it “doesn’t apply in modern agreements and is a bit of an anomaly”.

He went on to say the discussions focused on the timing of the payments, rather than increased payments, with another option being the companies paying a lump sum fee in response to getting rid of the tax.

A Rio spokesperson said they had been approached by the state government to “pay out” the rental fees but did not plan to accept it; arguing they have paid $13 billion to the state since 2006. Similarly, BHP was also contacted and negated the offer.

BHP Australia’s head of minerals, Mike Henry, strongly opposed the proposed tax, particularly due to its impact on investment, jobs, and the company’s competitiveness.

The tax has also faced opposition from the Minerals Council of Australia (MCA), with chief executive Brendan Pearson saying it would make WA the highest iron ore tax region in the world. Deputy prime minister and minister for agriculture and water resources Barnaby Joyce also disputed the higher tax due to its potential to discourage investment.

WA opposition leader Mark McGowan, however, said the state government was currently “at war with itself”.

“You have one senior minister saying ‘Lift the charge’ and you have the premier saying ‘Maybe we’ll get rid of it altogether’,” he said.

“What West Australians would like is a government with a bit of coherence and consistency, and at the moment we don’t have that.”

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.