❓ Opposition questions Premier Barnett about comments suggesting BHP and Rio Tinto are colluding on iron ore exports. Barnett denies using the terms 'collusion' or 'cartel', defends his right to comment on WA's commercial interests, and criticises the companies' strategy of increasing production during oversupply.
AnsweredQoN 790Legislative Assembly
QuestionView source ↗
IRON ORE EXPORT VOLUMES —
PREMIER'S COMMENTS
790. Mr M. McGOWAN to the Premier:
I refer to the Premier's comments yesterday regarding
BHP and Rio Tinto, and I quote —
I find it strange that the
companies are seemingly acting in a concert way .
Effectively, the Premier is using parliamentary privilege to
accuse these companies of collusion.
(1) Where is the Premier's evidence to support this
claim?
(2) Will the Premier table all of his evidence?
PREMIER'S COMMENTS
790. Mr M. McGOWAN to the Premier:
I refer to the Premier's comments yesterday regarding
BHP and Rio Tinto, and I quote —
I find it strange that the
companies are seemingly acting in a concert way .
Effectively, the Premier is using parliamentary privilege to
accuse these companies of collusion.
(1) Where is the Premier's evidence to support this
claim?
(2) Will the Premier table all of his evidence?
AnswerView source ↗
(1)–(2)
At no stage did I use the words ''collusion'' or ''cartel''
or make any such accusation. The word ''collusion'' has been used
in the media and the word ''cartel'' has been used by the member
for Victoria Park.
Mr B.S. Wyatt : That is what you alleged.
Mr C.J. BARNETT : No, I did not. The Hansard will show the media reports—did I use the word collusion? No. Did I use
the word cartel? No. Let us just be —
Several members interjected.
The SPEAKER : Members!
Mr C.J. BARNETT : It is a matter of fact that both of
those companies are pushing record volumes of iron ore —
Mr B.S. Wyatt : You didn't
even know how much they were exporting yesterday.
Mr C.J. BARNETT : I am telling
you, it is record volumes.
Mr B.S. Wyatt interjected.
The SPEAKER : Member for
Victoria Park, I call you to order for the first time.
Mr C.J. BARNETT : Both companies are pushing record
volumes of iron ore —
Mr B.S. Wyatt interjected.
The SPEAKER : Member for Victoria Park, I call you to
order for the second time.
Mr C.J. BARNETT : Both companies are pushing record
volumes of iron ore into the world market at a time when there is an oversupply
of iron ore and a lesser demand, or a slowdown in the growth of demand, from
China, and so we have an oversupply situation with stockpiles and the like at
steel mills. In that environment of a softening of demand, I do not think that
it is good commercial policy to be pushing more iron ore at record rates into
the market. That was my original comment and I stick by that. I also make the
point that the Western Australian government, on behalf of the Western
Australian people, is the owner of the iron ore. We do not just have a
regulatory role; we have a direct commercial interest that that iron ore is
sold at full price into the market. We derive a royalty, which is not a tax. A
royalty is the price at which the government sells the iron ore to the company,
so we have a direct commercial interest. I wonder whether the companies even
thought about that when they embarked on this marketing strategy.
If the price of iron ore stays at its low level or falls
further, there will be other Western Australian mining companies that will not
doubt go into loss situations and may well, in the worst-case scenario, be
forced to close with the loss of thousands of Western Australian jobs. The
public interest test for the government is royalty income—our direct
commercial interest, which not a tax—the status of smaller iron ore
producers and the protection of jobs. They are the public policy issues.
Members opposite may not like that I comment on public policy issues affecting
this state; I always have and I always will. I am not saying that I am always
right, but I will always stand up for Western Australia and its public
interest.
Ms R. Saffioti interjected.
The SPEAKER : Member for West Swan, I call you to order
for the first time.
Mr M. McGowan interjected.
Mr C.J. BARNETT : I think the question is to me, not to
the Leader of the Opposition. If he wants to come over to this side of the
chamber and ask himself a question, by all means do it!
Mr P.B. Watson interjected.
Mr C.J. BARNETT : I think I am being the adult in this
debate.
Again, as I have said over the last couple of days, over the
course of this decade, projects that are either under construction or committed
to will double the iron ore production from this state. But we now have a
period of very low prices—the lowest in five years. At this particular
moment in time—however long it lasts—it is not a time to be
pushing extra volumes into the market. I think from a commercial or business
point of view that is a flawed policy and many commentators both here and
around the world happen to have similar views. I think this debate has
basically got a bit out of proportion—I concede that.
Mr B.S. Wyatt : Your language has been very
inflammatory.
Mr C.J. BARNETT : I have not used words such as ''collusion''
or ''cartel'' —
Several members interjected.
Mr C.J. BARNETT : Mr Speaker, I am trying to answer the
question, but I will refuse to if members opposite continue to interrupt.
The SPEAKER : Supplementary question.
Mr C.J. BARNETT : I have not finished.
Mr W.J. Johnston : Why did you sit down?
Several members interjected.
Mr C.J. BARNETT : Because the Speaker was speaking.
Mr D.J. Kelly interjected.
The SPEAKER : Member for Bassendean, I call you to
order for the first time.
Mr C.J. BARNETT : I also made the point that
historically there have been various agreements and arrangements—generally
that have failed—between the two major iron ore producers. That is a
matter of fact. It is also a matter of fact that as a former Minister for
Resources; Development, and now as Premier, I have made public comments on
those issues, and I think I was probably right given the way it turned out.
Mr P.B. Watson interjected.
The SPEAKER : Member for
Albany, I call you to order for the first time.
Mr C.J. BARNETT : I do not need to restate that. In the
1990s, the companies assumed that they could merge, but they could not merge
without the approval of the Western Australian government. Every commentator in
Australia who did not know that, misunderstood it, including the companies. But
it was clear and it has always been the case.
Ms R. Saffioti : You were
ahead of the game.
Mr C.J. BARNETT : Well, I was
correct.
Ms R. Saffioti : Of course,
you are.
Mr C.J. BARNETT : I thank the member for acknowledging
that.
I used the term ''in concert''. Some may have
read more into that than was intended. I did not imply that they were behaving
in any collusive way—I never used that word.
Mr P.B. Watson : You are rewriting history again.
Mr C.J. BARNETT : No, I am not. I am saying that both
companies are employing a sales policy that is all but identical, and in that
sense it is in concert. The companies are not behaving, as some have suggested,
in a collusive way. They are fierce competitors in the marketplace and they
have been for three decades, but they are employing a very similar policy—probably
for their own reasons but maybe for the same reasons—that I think is
damaging to the Western Australian economy, to the iron ore industry, to the
small iron ore producers and to the people who they employ. That is why I take
a public stand on behalf of Western Australia.
At no stage did I use the words ''collusion'' or ''cartel''
or make any such accusation. The word ''collusion'' has been used
in the media and the word ''cartel'' has been used by the member
for Victoria Park.
Mr B.S. Wyatt : That is what you alleged.
Mr C.J. BARNETT : No, I did not. The Hansard will show the media reports—did I use the word collusion? No. Did I use
the word cartel? No. Let us just be —
Several members interjected.
The SPEAKER : Members!
Mr C.J. BARNETT : It is a matter of fact that both of
those companies are pushing record volumes of iron ore —
Mr B.S. Wyatt : You didn't
even know how much they were exporting yesterday.
Mr C.J. BARNETT : I am telling
you, it is record volumes.
Mr B.S. Wyatt interjected.
The SPEAKER : Member for
Victoria Park, I call you to order for the first time.
Mr C.J. BARNETT : Both companies are pushing record
volumes of iron ore —
Mr B.S. Wyatt interjected.
The SPEAKER : Member for Victoria Park, I call you to
order for the second time.
Mr C.J. BARNETT : Both companies are pushing record
volumes of iron ore into the world market at a time when there is an oversupply
of iron ore and a lesser demand, or a slowdown in the growth of demand, from
China, and so we have an oversupply situation with stockpiles and the like at
steel mills. In that environment of a softening of demand, I do not think that
it is good commercial policy to be pushing more iron ore at record rates into
the market. That was my original comment and I stick by that. I also make the
point that the Western Australian government, on behalf of the Western
Australian people, is the owner of the iron ore. We do not just have a
regulatory role; we have a direct commercial interest that that iron ore is
sold at full price into the market. We derive a royalty, which is not a tax. A
royalty is the price at which the government sells the iron ore to the company,
so we have a direct commercial interest. I wonder whether the companies even
thought about that when they embarked on this marketing strategy.
If the price of iron ore stays at its low level or falls
further, there will be other Western Australian mining companies that will not
doubt go into loss situations and may well, in the worst-case scenario, be
forced to close with the loss of thousands of Western Australian jobs. The
public interest test for the government is royalty income—our direct
commercial interest, which not a tax—the status of smaller iron ore
producers and the protection of jobs. They are the public policy issues.
Members opposite may not like that I comment on public policy issues affecting
this state; I always have and I always will. I am not saying that I am always
right, but I will always stand up for Western Australia and its public
interest.
Ms R. Saffioti interjected.
The SPEAKER : Member for West Swan, I call you to order
for the first time.
Mr M. McGowan interjected.
Mr C.J. BARNETT : I think the question is to me, not to
the Leader of the Opposition. If he wants to come over to this side of the
chamber and ask himself a question, by all means do it!
Mr P.B. Watson interjected.
Mr C.J. BARNETT : I think I am being the adult in this
debate.
Again, as I have said over the last couple of days, over the
course of this decade, projects that are either under construction or committed
to will double the iron ore production from this state. But we now have a
period of very low prices—the lowest in five years. At this particular
moment in time—however long it lasts—it is not a time to be
pushing extra volumes into the market. I think from a commercial or business
point of view that is a flawed policy and many commentators both here and
around the world happen to have similar views. I think this debate has
basically got a bit out of proportion—I concede that.
Mr B.S. Wyatt : Your language has been very
inflammatory.
Mr C.J. BARNETT : I have not used words such as ''collusion''
or ''cartel'' —
Several members interjected.
Mr C.J. BARNETT : Mr Speaker, I am trying to answer the
question, but I will refuse to if members opposite continue to interrupt.
The SPEAKER : Supplementary question.
Mr C.J. BARNETT : I have not finished.
Mr W.J. Johnston : Why did you sit down?
Several members interjected.
Mr C.J. BARNETT : Because the Speaker was speaking.
Mr D.J. Kelly interjected.
The SPEAKER : Member for Bassendean, I call you to
order for the first time.
Mr C.J. BARNETT : I also made the point that
historically there have been various agreements and arrangements—generally
that have failed—between the two major iron ore producers. That is a
matter of fact. It is also a matter of fact that as a former Minister for
Resources; Development, and now as Premier, I have made public comments on
those issues, and I think I was probably right given the way it turned out.
Mr P.B. Watson interjected.
The SPEAKER : Member for
Albany, I call you to order for the first time.
Mr C.J. BARNETT : I do not need to restate that. In the
1990s, the companies assumed that they could merge, but they could not merge
without the approval of the Western Australian government. Every commentator in
Australia who did not know that, misunderstood it, including the companies. But
it was clear and it has always been the case.
Ms R. Saffioti : You were
ahead of the game.
Mr C.J. BARNETT : Well, I was
correct.
Ms R. Saffioti : Of course,
you are.
Mr C.J. BARNETT : I thank the member for acknowledging
that.
I used the term ''in concert''. Some may have
read more into that than was intended. I did not imply that they were behaving
in any collusive way—I never used that word.
Mr P.B. Watson : You are rewriting history again.
Mr C.J. BARNETT : No, I am not. I am saying that both
companies are employing a sales policy that is all but identical, and in that
sense it is in concert. The companies are not behaving, as some have suggested,
in a collusive way. They are fierce competitors in the marketplace and they
have been for three decades, but they are employing a very similar policy—probably
for their own reasons but maybe for the same reasons—that I think is
damaging to the Western Australian economy, to the iron ore industry, to the
small iron ore producers and to the people who they employ. That is why I take
a public stand on behalf of Western Australia.
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