“The State Agreements have afforded enormous benefits to RTIO and BHP, however they are now out of date and do not reflect modern practices including Singapore trading hubs, contracting, fly-in-fly-out workforces and automation”, he said.
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A spokeswoman for Mr Forrest said the mining tax would be a “unilateral variation” of state agreements and a “bad precedent and he does not support it”.
Mr Wyatt said the government had capitulated to the “erratic ego” of Mr Grylls and his plan would not solve the state’s financial problems – but at least he had one, unlike the premier and treasurer, who respectively had no plan or just wanted to sell assets.
“It’s been a painful few years of falling iron ore prices and lower margins but Rio Tinto and BHP’s strategy of raising production to force lesser-quality producers out of business appears to be paying off”, London firm SP Angel said in a note this week.
If the $5 tax is the stick the Nationals plan to use to bring the miners to the cause, the carrot would be the reduction or elimination of that tax once WA’s GST share returns to 75 cents or more.
“Technically, we can”, Mr Barnett said.
“Brendon Grylls would go with Labor tomorrow, end of story, and so would a few other Nationals”, the source said.
Notre Dame political analyst Martin Drum believes whatever the difficulties of introducing such a tax, it gives the Nationals a clear plan, and a clear point of difference with their alliance partners, the Liberal Party.
He proposed the tax on Monday, declaring the government needed “new ideas” to fix the state’s failing finances and win the election. It has spent roughly 25 per cent of mining royalties in regional areas as part of a deal struck with Mr Grylls when he emerged as kingmaker at the 2008 election.
The hike would add A$7.2 billion to the state’s budget across its forward estimates and bring it back into surplus, the party said.
The Liberal-National government has delivered record debt and deficit despite one of the biggest revenue bonanzas in a generation.
BHP says the proposal is damaging and stable government policy was “vital for the economic security of WA and the nation”.
“We do not understand why a proposal that is so discriminatory and uneconomic would be targeted at two companies”, BHP said in an e-mailed statement.
The spokeswoman said BHP had paid $65 billion in taxes and royalties in Australia over the past 10 years, including $10.6 billion in royalties to the WA government.
Rio says it also has been one of Australia’s largest corporate taxpayers and has paid almost $11B in royalties to the Western Australian government since 2010 on top of $52B spent on local goods and services over the same period.
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“This has been on top of our $52 billion spend on local goods and services over the same period”.
