A parliamentary question regarding the discrepancy in iron ore production forecasts and its impact on royalty collection, specifically questioning the influence of a future price fall on prior years and the exchange rate used for calculations.

AnsweredQoN 690Legislative Council
Asked
26 June 2008
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RESOURCES PRODUCTION FORECASTS — BUDGET DISCREPANCY
I refer the minister to his answer to question on notice 6430 concerning forecasts for quantity and value of iron ore production for the budget estimates period. (1) Why does a forecast 25 per cent price fall in 2011-12 impact on royalty collection in the two prior years? (2) What was the United States-Australian dollar exchange rate used to calculate the production values given by the minister in reply to question without notice 534? Hon KIM CHANCE

AnswerView source ↗

I thank the honourable Leader of the Opposition for some notice of the question. We always learn something new in question time, and I certainly learnt something new from the first part of the answer to this question. (1) The answer to question on notice 6430 stated that the 25 per cent price fall in the 2011-12 financial year also impacts the 2010-11 financial year. This is because iron ore prices are set for the Japanese financial year, and the first quarter of the 2011-12 Japanese financial year falls within the 2010-11 Australian financial year. (2) The US-Australian dollar estimated exchange rate used for 2007-08 is US89.21c, and the estimated exchange rate for the period 2008-09 to 2010-11 is US92.5c.
(1) Why does a forecast 25 per cent price fall in 2011-12 impact on royalty collection in the two prior years? (2) What was the United States-Australian dollar exchange rate used to calculate the production values given by the minister in reply to question without notice 534? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. We always learn something new in question time, and I certainly learnt something new from the first part of the answer to this question. (1) The answer to question on notice 6430 stated that the 25 per cent price fall in the 2011-12 financial year also impacts the 2010-11 financial year. This is because iron ore prices are set for the Japanese financial year, and the first quarter of the 2011-12 Japanese financial year falls within the 2010-11 Australian financial year. (2) The US-Australian dollar estimated exchange rate used for 2007-08 is US89.21c, and the estimated exchange rate for the period 2008-09 to 2010-11 is US92.5c.
(2) What was the United States-Australian dollar exchange rate used to calculate the production values given by the minister in reply to question without notice 534? Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. We always learn something new in question time, and I certainly learnt something new from the first part of the answer to this question. (1) The answer to question on notice 6430 stated that the 25 per cent price fall in the 2011-12 financial year also impacts the 2010-11 financial year. This is because iron ore prices are set for the Japanese financial year, and the first quarter of the 2011-12 Japanese financial year falls within the 2010-11 Australian financial year. (2) The US-Australian dollar estimated exchange rate used for 2007-08 is US89.21c, and the estimated exchange rate for the period 2008-09 to 2010-11 is US92.5c.
Hon KIM CHANCE replied: I thank the honourable Leader of the Opposition for some notice of the question. We always learn something new in question time, and I certainly learnt something new from the first part of the answer to this question. (1) The answer to question on notice 6430 stated that the 25 per cent price fall in the 2011-12 financial year also impacts the 2010-11 financial year. This is because iron ore prices are set for the Japanese financial year, and the first quarter of the 2011-12 Japanese financial year falls within the 2010-11 Australian financial year. (2) The US-Australian dollar estimated exchange rate used for 2007-08 is US89.21c, and the estimated exchange rate for the period 2008-09 to 2010-11 is US92.5c.
I thank the honourable Leader of the Opposition for some notice of the question. We always learn something new in question time, and I certainly learnt something new from the first part of the answer to this question. (1) The answer to question on notice 6430 stated that the 25 per cent price fall in the 2011-12 financial year also impacts the 2010-11 financial year. This is because iron ore prices are set for the Japanese financial year, and the first quarter of the 2011-12 Japanese financial year falls within the 2010-11 Australian financial year. (2) The US-Australian dollar estimated exchange rate used for 2007-08 is US89.21c, and the estimated exchange rate for the period 2008-09 to 2010-11 is US92.5c.
(1) The answer to question on notice 6430 stated that the 25 per cent price fall in the 2011-12 financial year also impacts the 2010-11 financial year. This is because iron ore prices are set for the Japanese financial year, and the first quarter of the 2011-12 Japanese financial year falls within the 2010-11 Australian financial year. (2) The US-Australian dollar estimated exchange rate used for 2007-08 is US89.21c, and the estimated exchange rate for the period 2008-09 to 2010-11 is US92.5c.
(2) The US-Australian dollar estimated exchange rate used for 2007-08 is US89.21c, and the estimated exchange rate for the period 2008-09 to 2010-11 is US92.5c.

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