❓ Question regarding WA's iron ore export volumes in relation to the 2014-15 budget and concerns about oversupply. Premier deflects, leading to a heated exchange about iron ore market dynamics and the government's economic strategy.
AnsweredQoN 779Legislative Assembly
QuestionView source ↗
IRON ORE
EXPORT VOLUMES — 2014–15 STATE BUDGET
779. Mr W.J. JOHNSTON to the
Premier:
I refer to the 2014–15 state budget that assumes
annual increases in iron ore exports of 6.8 per cent per year, and the Premier's
statement of 9 October 2014 that BHP Billiton Ltd and Rio Tinto are flooding
the market to force iron ore prices down. Is the increase in iron ore export
volumes for the current financial year greater than the budget expectations;
and, if so, by how much?
EXPORT VOLUMES — 2014–15 STATE BUDGET
779. Mr W.J. JOHNSTON to the
Premier:
I refer to the 2014–15 state budget that assumes
annual increases in iron ore exports of 6.8 per cent per year, and the Premier's
statement of 9 October 2014 that BHP Billiton Ltd and Rio Tinto are flooding
the market to force iron ore prices down. Is the increase in iron ore export
volumes for the current financial year greater than the budget expectations;
and, if so, by how much?
AnswerView source ↗
I would need to consult the budget papers on that.
Several members interjected.
The SPEAKER :
Members!
Mr C.J. BARNETT :
How do we get a 40 per cent price floor?
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park!
Mr C.J. BARNETT :
It is pretty damn obvious that the volume has been —
Mr B.S. Wyatt interjected.
Mr C.J. BARNETT :
Mr Speaker, it is not a debate.
The SPEAKER :
Member for Victoria Park!
Mr C.J. BARNETT : I
think it is fairly obvious to anyone who watches the commodity market —
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I call you to order for the first time.
Mr C.J. BARNETT :
Anyone looking at the volumes going out of Port Hedland would find they are
running at historic record rates. They are pushing out large amounts of iron
ore into a very depressed market.
Mr B.S. Wyatt : How
does that compare with the budget?
Mr C.J. BARNETT : I
would have to have a look at the budget papers.
Several members interjected.
Mr C.J. BARNETT :
If the member for Victoria Park were serious, he would have given advice that
he wanted that information.
Several members interjected.
Mr C.J. BARNETT : I
do not spend my time on Tuesday morning trying to guess questions. I do not
know why —
Mr P.B. Watson interjected.
The SPEAKER :
Member for Albany, I call you to order for the first time. Through the Chair,
Premier. Thanks.
Mr C.J. BARNETT :
Clearly, record volumes of iron ore are being pushed out of Western Australian
ports. I find that strange behaviour.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I call you to order for the second time.
Mr C.J. BARNETT :
There are record volumes. Look at the figures going out of the ports —
Ms M.M. Quirk interjected.
The SPEAKER :
Member for Girrawheen, I call you to order for the first time.
Mr
C.J. BARNETT : I do not own a single share but if I were a large shareholder
or institutional investor in the major mining companies, I would be questioning
why they are pushing high volumes into a very depressed iron ore market. I
suspect that major institutional shareholders are doing exactly that right now
because the business logic of that is unsound. That is my observation. I think
members opposite would find that many major shareholders will be wondering why.
As I have said, iron ore volumes will increase; there will be further mine
openings, but when there is volatility in the commodity price from up to
$160-odd a couple of years ago and now down to $80 or less, we would think
major producers would respond to the price changes in the volume they produce—maybe
at the margin, but they would respond. It is at the margin that will bring
about price changes. That is my view.
Several members interjected.
The SPEAKER : Leader of the Opposition! Member for West
Swan!
Mr C.J. BARNETT :
That is my view. Members opposite may disagree but I suggest major
institutional investors around the world have a view closer to my view than to
the view of members opposite.
Several members interjected.
The SPEAKER :
Members!
Mr C.J. BARNETT :
How do we get a 40 per cent price floor?
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park!
Mr C.J. BARNETT :
It is pretty damn obvious that the volume has been —
Mr B.S. Wyatt interjected.
Mr C.J. BARNETT :
Mr Speaker, it is not a debate.
The SPEAKER :
Member for Victoria Park!
Mr C.J. BARNETT : I
think it is fairly obvious to anyone who watches the commodity market —
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I call you to order for the first time.
Mr C.J. BARNETT :
Anyone looking at the volumes going out of Port Hedland would find they are
running at historic record rates. They are pushing out large amounts of iron
ore into a very depressed market.
Mr B.S. Wyatt : How
does that compare with the budget?
Mr C.J. BARNETT : I
would have to have a look at the budget papers.
Several members interjected.
Mr C.J. BARNETT :
If the member for Victoria Park were serious, he would have given advice that
he wanted that information.
Several members interjected.
Mr C.J. BARNETT : I
do not spend my time on Tuesday morning trying to guess questions. I do not
know why —
Mr P.B. Watson interjected.
The SPEAKER :
Member for Albany, I call you to order for the first time. Through the Chair,
Premier. Thanks.
Mr C.J. BARNETT :
Clearly, record volumes of iron ore are being pushed out of Western Australian
ports. I find that strange behaviour.
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I call you to order for the second time.
Mr C.J. BARNETT :
There are record volumes. Look at the figures going out of the ports —
Ms M.M. Quirk interjected.
The SPEAKER :
Member for Girrawheen, I call you to order for the first time.
Mr
C.J. BARNETT : I do not own a single share but if I were a large shareholder
or institutional investor in the major mining companies, I would be questioning
why they are pushing high volumes into a very depressed iron ore market. I
suspect that major institutional shareholders are doing exactly that right now
because the business logic of that is unsound. That is my observation. I think
members opposite would find that many major shareholders will be wondering why.
As I have said, iron ore volumes will increase; there will be further mine
openings, but when there is volatility in the commodity price from up to
$160-odd a couple of years ago and now down to $80 or less, we would think
major producers would respond to the price changes in the volume they produce—maybe
at the margin, but they would respond. It is at the margin that will bring
about price changes. That is my view.
Several members interjected.
The SPEAKER : Leader of the Opposition! Member for West
Swan!
Mr C.J. BARNETT :
That is my view. Members opposite may disagree but I suggest major
institutional investors around the world have a view closer to my view than to
the view of members opposite.
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