Royalty collections from the Western Australian mining industry have helped the State Government to a $4.4 billion surplus for the three months to September 30.
However, WA Premier Mark McGowan has warned the volatile price of iron ore has highlighted the importance of careful financial planning.
The WA Government’s release of the September 2021 quarterly financial results brings to book significant revenue collections.
According to the government, a continued strong performance by the mining sector combined with high iron ore prices has underpinned strong royalty collections in the September quarter.
“The iron ore price averaged $US163.8 ($229.54) per tonne for the first three months of the financial year,” the government stated.
“However, volatility in the iron ore price has continued with the price falling from around $US220 per tonne in early July to $US118 per tonne by the end of September.
“The $4.4 billion surplus for the quarter largely reflects the timing of those revenue collections, particularly the receipt of the annual GST top-up grant of $2.1 billion, as well as the impact on dividends of the Bell Group settlement of $455 million from the Insurance Commission of Western Australia.”
McGowan said the September 2021 quarterly results show Western Australia’s finances are on track to meet the strong results forecast in the Budget.
“Our solid financial position further highlights our world-leading response to the pandemic,” he said.
“Western Australia is the safest place to be with the greatest opportunities.
“The September operating surplus largely reflects the early receipt of revenue expected at the time of the Budget, particularly the annual GST top-up payment.
“Our strong economy is boosting revenue collections across the board. However, continued volatility in the iron ore price highlights why we must budget carefully.”
In the 2021 financial year (FY21), record contributions from the mining and resources sector lifted Western Australia to a State Budget surplus of $5.6 billion.
The state’s iron ore sector paid $11.3 billion in royalties for FY21, pushing the state’s surplus $2.5 billion higher than the Treasury predicted.