31/03/2011 - 00:00

Fight over new tax gets serious

31/03/2011 - 00:00


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Voicing suspicion of Canberra’s intentions always plays out well in WA politics.

PRIME Minister Julia Gillard has flown into a hornets’ nest, with this week’s visit to Perth coming only days after the federal government confirmed it will push ahead with the planned new mining tax.

But if Ms Gillard thinks she can soft soap the Western Australian mining industry, let alone the state government, with some friendly announcements without dealing with the main issue, she’s likely to be sadly disappointed.

The new sticking point over the tax, apart from its actual introduction, is the implication for royalty payments, which go to the state government.

The Canberra plan is for the miners to be reimbursed for the royalties they pay. The rationale appears to be they should not be taxed twice, albeit by different governments.

But the move that seems to have caused the premier, Colin Barnett, to see red is the federal warning that the states not increase royalties once the new tax is introduced, probably next year. The inference is the states could go for broke on royalties, knowing that Canberra will effectively foot the bill for the companies.

Mr Barnett is convinced that the Commonwealth’s approach signals that neither the federal cabinet nor the bureaucracy understands, or want to understand, the real issue. And that is the minerals are owned by Western Australians, and the royalties are the price the miners pay to WA for the right to exploit them. The Commonwealth has no role in that transaction.

And the prospect of further royalty increases is on the Barnett agenda. A long-term concession enjoyed by BHP Billiton and Rio Tinto, which enables them to mine ‘fines’ iron ore cheaper than ‘lump’ ore is under scrutiny, the premier told Parliament.

“Members can therefore expect the fines rate to step up slowly ... and that will generate significant revenue to Western Australia over time,” Mr Barnett said.

“The federal government is trying to say, ‘no you can’t do that. You can’t charge a proper price for your own minerals because you might upset our minerals resource rent tax. And if you do we’re going to take further GST off you or maybe cut funding for disability, health, education and whatever else’.

“All I say is: bring it on because Western Australia will not be intimidated.”

And the premier’s stand is backed by the opposition, with Eric Ripper telling Parliament: “We support the state’s independence on royalties. We reject Commonwealth interference on our rights.”

Don’t rule out the possibility of this issue ending up in a High Court challenge by mid-level miners, backed by the state government.

There’s a growing view that, should that happen, no matter what the court decides, Mr Barnett wins, such is the traditional suspicion directed at Canberra.

Get your votes in

MARK your diaries. If the government gets its way, the next state election will be held on Saturday March 9, 2013.

If that happens, the Liberal-National alliance will have served four years and seven months in power – a record for WA politics.

The government’s wishes are spelt out in legislation for fixed four-year terms, which has just been introduced for debate.

At one stage, support for fixed four-year terms was only lukewarm. The main reason was that, by leaving the timing up to the premier of the day, it was thought the party in power gained a slight advantage. There was also a chance the opposition could be caught napping.

That theory was laid to rest at the last election in September 2008, called six months early by then premier Alan Carpenter. It was an attempt to wrong foot the opposition after Colin Barnett cancelled retirement plans and replaced Troy Buswell as Liberal leader.

That result showed that surprise early polls could also be seen by a suspicious electorate as being sneaky, and backfire on the government of the day.

However, this government’s legislation only mentions elections for the Legislative Council being held on the second Saturday of March every four years. There is no mention of the lower house, the Legislative Assembly, where government is won and lost.

The reason is constitutional. To fix terms for the assembly would require a change to the state’s constitution. That would mean a referendum, and there’s precious little enthusiasm for that. But because the council already has fixed terms, setting its election date can be done by legislation.

The move kills two birds with one stone. As assembly and council polls have always coincided for as long as anyone can remember, the prevailing wisdom is for that happy coincidence to continue.

No government would be game to break the nexus, so the thinking goes, unless it is defeated on the floor of the house on a major issue.

That would allow the assembly to be dissolved before November 1 in the year prior to the scheduled election. There would be provision for an early assembly election to break any deadlock. Presumably the nexus would then be restored at the next council election, although that is not written in stone.

Labor says it prefers the third Saturday in February every fourth year as the election date. Electoral Affairs Minister Norman Moore says he’ll consider it, but still believes there is majority support for the government’s March plan.

Either way, Alan Carpenter’s snap poll looks like being WA’s last.

Times are a changin’

THE Liberal-National Party coalition achieved a primary vote of 51.2 per cent in its convincing victory in Saturday’s NSW election, which ended 16 years of Labor rule.

That’s a good result for the conservative parties, especially compared with the Labor vote. It slumped to 25.5 per cent, representing an extraordinary swing of 17 per cent.

The emergence of minor parties in the past 30 years has made it harder for Liberal and Labor to achieve primary votes of more than 50 per cent, even in very good years.

That’s illustrated by the fact that with Neville Wran as leader in the 1978 election, Labor scored 57.8 per cent of the primary vote. That result effectively set Labor up in government for another 10 years.

So in the normal course of events, the coalition under new Premier Barry O’Farrell can expect two, and possibly three, terms in power, depending on how it governs and whether Labor can regroup and regain some credibility.

And there’s a potential challenge for the federal government. No longer will it have a moribund administration in NSW to deal with.

It will be a contest of wits as the Gillard government, which has its share of problems, deals with a new team in the most populous state, long considered to be Labor heartland.




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