❓ Premier Barnett criticises the federal government's Minerals Resource Rent Tax (MRRT), highlighting its potential negative impact on WA's mining industry, particularly the emerging magnetite iron ore sector, and condemning perceived threats to reduce the state's GST revenue.
AnsweredQoN 158Legislative Assembly
QuestionView source ↗
MINERALS RESOURCE RENT TAX — WESTERN AUSTRALIAN IMPACT
I refer to the federal government’s announcement today that it has accepted all 98 recommendations of the Argus report on the minerals resource rent tax and to the federal Treasurer’s comment that he did not expect any kerfuffle with the states, despite the threat that any increase in royalties could result in additional cuts to goods and services tax revenue. Could the Premier explain the impact the minerals resource rent tax will have on Western Australia and how this impact might be compounded if the commonwealth carries out its threat to further cut the state’s ever-dwindling share of GST revenue? Mr C.J. BARNETT
I refer to the federal government’s announcement today that it has accepted all 98 recommendations of the Argus report on the minerals resource rent tax and to the federal Treasurer’s comment that he did not expect any kerfuffle with the states, despite the threat that any increase in royalties could result in additional cuts to goods and services tax revenue. Could the Premier explain the impact the minerals resource rent tax will have on Western Australia and how this impact might be compounded if the commonwealth carries out its threat to further cut the state’s ever-dwindling share of GST revenue? Mr C.J. BARNETT
AnswerView source ↗
That was a very good question from the member for Geraldton. Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Could the Premier explain the impact the minerals resource rent tax will have on Western Australia and how this impact might be compounded if the commonwealth carries out its threat to further cut the state’s ever-dwindling share of GST revenue? Mr C.J. BARNETT replied: That was a very good question from the member for Geraldton. Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT replied: That was a very good question from the member for Geraldton. Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
That was a very good question from the member for Geraldton. Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Could the Premier explain the impact the minerals resource rent tax will have on Western Australia and how this impact might be compounded if the commonwealth carries out its threat to further cut the state’s ever-dwindling share of GST revenue? Mr C.J. BARNETT replied: That was a very good question from the member for Geraldton. Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT replied: That was a very good question from the member for Geraldton. Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
That was a very good question from the member for Geraldton. Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Indeed, the member for Geraldton has a very particular interest in this issue, as he has been a strong advocate of the Oakajee developments and a strong advocate of the mining interests in the Mid West, which of course are iron ore and magnetite iron ore. Low-grade iron ore, which is 25 to 30 per cent of mined ore, requires a significant amount of mineral processing to be produced into a marketable product, unlike the direct shipping ores from the Pilbara. Yet this emerging magnetite industry has been lumped in with the long and well-established operations of companies such as BHP Billiton and Rio Tinto, which have vast amounts of infrastructure that they are able to deduct progressively against this tax. That luxury is not available to new magnetite iron ore producers who will face a significant financial impost from this tax. This minerals resource rent tax has been, in my experience, the most clumsy, ill thought out, incompetent piece of public policy I have ever seen. Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Several members interjected. The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
The SPEAKER : Thank you, members! Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : We know members opposite support the federal government; we know they support Prime Minister Gillard and Treasurer Swan. To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
To go to the point, it is no surprise that the Argus report was accepted by the federal government and that it will use that report as some justification for its minerals resource rent tax, for which it intends to bring in legislation in the near future. However, I was particularly disturbed today by the veiled threats from the Treasurer when he basically accused the states of being in a position to opportunistically take advantage of this tax announcement while threatening us with cuts to GST revenue and other commonwealth programs if we do anything to change our royalty rates. Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Let us go back one step—a long step. The whole argument of the federal Labor government has been that Australians do not receive enough for their natural resources. Now it is saying, “But hang on, owners of the resources—the states—don’t you dare change royalty rates because if you do, we’ll punish you.” What an absolute contradiction! How can the federal government punish us? We get only 68c in the dollar now for GST. On state Treasury forecasts we will be down to 41c in the dollar in three years. How much left is there to take? And this state is leading the nation! We dominate investment. We provide over 45 per cent of the nation’s exports. We provide 75 per cent of the nation’s exports to China. Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Having just been in Japan and Korea, I can say that they basically do not care about the rest of the country. The Chinese do not care; they care about this state and our good record in developing natural resources. This federal Labor government is threatening future development, particularly development of the magnetite iron ore industry. Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr F.M. Logan interjected. Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : I know that the member for Cockburn does not agree. He supports Wayne Swan. Does he or does he not support Wayne Swan? Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Several members interjected. Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Does he or does he not? Does the member for Cockburn support Wayne Swan in threatening Western Australia like he did today? Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr F.M. Logan : He threatened us on water; he threatened us on a whole series of things. Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Reject him! Disown him! Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr F.M. Logan : This is unbelievable! Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : We know when it comes to the crunch that the Labor Party in Western Australia will just fall into line. We all know that. Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : Do you want me to interject? Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : No, I do not want the Leader of the Opposition to speak at all. I have more to say. Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Several members interjected. The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
The SPEAKER : Thank you, members! Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : We support the state’s right to raise royalties. Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : I do not want to hear from the Leader of the Opposition; he can make a speech later. Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : We support the state’s independence on royalties. We reject commonwealth interference on our rights. Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Yes, yes. The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
The SPEAKER : Leader of the Opposition, I want to hear from the Premier and I formally call you to order for the first time today. Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : I can understand that there might be a view that if the federal government will refund the companies the amount they will pay in royalties—which I think is a foolish policy position—federal Treasury might have a fear that the state might, for example, double royalties because that is a way in which we could effectively tax the commonwealth. Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : We lose it to GST anyway. Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : But that is not the intention. I take some exception to the implication that this state government will take that position. Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : It is your GST! Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Go away! I therefore take some exception to that. Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Several members interjected. Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : Members opposite are not interested. When they are over on this side of the chamber again, if they ever get here, they can answer questions. The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
The SPEAKER : Premier! Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : If that was in the federal Treasurer’s mind, it is an insult. It is an insult to the Parliament, to the government and to the people of Western Australia if the federal government’s thinking is so perverted that it believes we would opportunistically use this tax announcement in a de facto way to tax the commonwealth. The relevant point, however, is that the minerals belong constitutionally to the people of the state of Western Australia. Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : That is absolutely right; they belong to us. Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : They do. This side of politics will always preserve the state’s right to increase or decrease royalty rates or introduce new royalty rates—whatever we like to do. Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : It’s a bipartisan position. Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : No, it is not; it is a Liberal position. The Labor position is coming out of Canberra. I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
I will give one example. Last year the state government negotiated an exceptional arrangement with BHP and Rio to remove some of the concessions under their state agreement acts. There remains a further concession that applies under the Mining Act to all iron ore miners. That concession is that the royalty rate under the Mining Act for lump iron ore, the rocky bits, is 7.5 per cent; and the rate for fines iron ore, the powdery stuff, is 5.625 per cent. There were good reasons back in the 1960s and 1970s for a different royalty rate; that is, fines were regarded as an inferior product. That is no longer the case. For most steel producers it is an equal, if not superior, product. I visited the new Hyundai steel plant in Seoul, South Korea two weeks ago. I might say that piles of fines from Western Australia were undercover, not out in the open. The point was made that the preferred feedstock for that new steel mill was Western Australian fines; 70 per cent of their feedstock was from the Pilbara and it will go to 85 per cent. The point I make is that while historically fines might have been an inferior product; today they are an equal, if not a superior, desired feedstock, certainly into the newer steel mills. This state government has stated publicly over the past 12 months that we believe this is an anomaly that should be corrected slowly over time. We are considering that in government. We are not going to make any change. I accept the goodwill of BHP and Rio. Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr E.S. Ripper : I think that’s a threat. Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
Mr C.J. BARNETT : It is not a threat; it is an observation. We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
We should charge the fair and proper price for natural resources. Members can therefore expect the fines rate to step up slowly, perhaps not fully to the lump rate but closer to it, and that will generate significant revenue to Western Australia over time. The companies know that; the companies expect that. The federal government is trying to say, “No, you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do, we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else.” All I say is: bring it on, because Western Australia will not be intimidated by the likes of Wayne Swan.
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