❓ Hon. Norman Moore questions the WA government's iron ore royalty forecasts, given expected export growth from new projects. Hon. Kate Doust confirms growth is factored in, but GST impacts royalty revenue.
AnsweredQoN 487Legislative Council
QuestionView source ↗
STATE BUDGET — RESOURCE ROYALTIES
I refer to the latest state budget estimates for resource royalties, as outlined on page 245 of budget paper No 2, volume 1, which shows iron ore royalties broadly stable for the next three years, but then falling consistently with the budget forecast of a 25 per cent fall in iron ore prices in 2011-12. (1) Does the government expect Western Australia’s iron ore exports to grow as a result of new projects coming on stream, such as Fortescue Metals Group Ltd developments, the Rio Tinto-Hancock joint venture, the mid-west iron producers anticipating expansion, as well as a host of other iron ore companies planning new iron ore production? (2) If so, why do the budget forecasts of iron ore royalties not reflect expected growth in volume of iron ore exports over the coming four years? Hon KATE DOUST
I refer to the latest state budget estimates for resource royalties, as outlined on page 245 of budget paper No 2, volume 1, which shows iron ore royalties broadly stable for the next three years, but then falling consistently with the budget forecast of a 25 per cent fall in iron ore prices in 2011-12. (1) Does the government expect Western Australia’s iron ore exports to grow as a result of new projects coming on stream, such as Fortescue Metals Group Ltd developments, the Rio Tinto-Hancock joint venture, the mid-west iron producers anticipating expansion, as well as a host of other iron ore companies planning new iron ore production? (2) If so, why do the budget forecasts of iron ore royalties not reflect expected growth in volume of iron ore exports over the coming four years? Hon KATE DOUST
AnswerView source ↗
I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
(1) Does the government expect Western Australia’s iron ore exports to grow as a result of new projects coming on stream, such as Fortescue Metals Group Ltd developments, the Rio Tinto-Hancock joint venture, the mid-west iron producers anticipating expansion, as well as a host of other iron ore companies planning new iron ore production? (2) If so, why do the budget forecasts of iron ore royalties not reflect expected growth in volume of iron ore exports over the coming four years? Hon KATE DOUST replied: I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
(2) If so, why do the budget forecasts of iron ore royalties not reflect expected growth in volume of iron ore exports over the coming four years? Hon KATE DOUST replied: I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
Hon KATE DOUST replied: I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
(1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
(2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
(1) Does the government expect Western Australia’s iron ore exports to grow as a result of new projects coming on stream, such as Fortescue Metals Group Ltd developments, the Rio Tinto-Hancock joint venture, the mid-west iron producers anticipating expansion, as well as a host of other iron ore companies planning new iron ore production? (2) If so, why do the budget forecasts of iron ore royalties not reflect expected growth in volume of iron ore exports over the coming four years? Hon KATE DOUST replied: I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
(2) If so, why do the budget forecasts of iron ore royalties not reflect expected growth in volume of iron ore exports over the coming four years? Hon KATE DOUST replied: I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
Hon KATE DOUST replied: I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
I thank the honourable member for some notice of this question. (1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
(1) The royalty estimates assume that the total volume of iron ore production grows by 22 per cent in 2008-09, 8.7 per cent in 2009-10, two per cent in 2010-11 and by 1.3 per cent in 2011-12. Projects such as Rapid Growth 3, Hope Downs and Cloudbreak are included in these projections. I refer the member to page 84 of the 2008-09 budget paper No 3, Economic and Fiscal Outlook . The production forecasts for iron ore and other resource commodities are based on an annual survey of producers that is conducted by the Department and Industry and Resources. Only those projects that are assessed as having a strong likelihood of proceeding are included in the projections. In most cases this requires that the projects have received both final investment approval from the operators and necessary government approvals. (2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
(2) See above. On a lagged basis, increases in royalty revenue result in reductions in the state’s share of the goods and services tax.
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