A proposed tax hike on major miners BHP Billiton and Rio Tinto has been further criticised this week, with accounting firm PwC saying it would have “no net benefit” to the state, and the Minerals Council of Australia saying the tax would send WA GST to other states.
WA Nationals leader Brendon Grylls earlier this year proposed a 25c per tonne royalty charged to Rio and BHP be increased to $5 per tonne – a suggestion which has been universally dismissed by the industry.
Grylls has nonetheless maintained his campaign for the tax hike, which he said would help the state pay for some of the regional issues left behind by the miners.
But PwC this week said the tax would do no good for the state.
PwC tax partner Paul Abbey reportedly told the AFR the additional revenue would be cancelled out by economic drag, GST redistribution and tax breaks.
“The consequences of this are quite complex and the risk is the consequences mean there is no net benefit for Western Australia,” Abbey was quoted as saying.
His statements came a day after the Minerals Council of Australia released its own analysis, which suggested “the claimed benefits of the tax will go almost exclusively to other states”.
“By introducing the Grylls iron ore tax, WA would incur the majority of risks associated with the tax including impacts on the workforce, the loss of its reputation as a stable investment jurisdiction and the potential fall in investment, but receive little benefit,” Minerals Council chief executive Brendan Pearson said.
“The results confirm the short-sightedness of the new Grylls iron ore tax and demonstrate that off-the-cuff attempts at populist political policies are no substitute for genuine attempts to improve the fiscal state of the WA budget.”