The state opposition says it has obtained documents that show the Barnett government is considering a "premium" payment for any government approval for the proposed Pilbara iron ore merger between BHP Billiton and Rio Tinto.
The state opposition says it has obtained documents that show the Barnett government is considering a "premium" payment for any government approval for the proposed Pilbara iron ore merger between BHP Billiton and Rio Tinto.
Opposition state development spokesperson Mark McGowan today said that a briefing note from the Department of Treasury and Finance to the Premier dated June 18 2009 states: "Another option could be to require BHPB and/or Rio Tinto to pay some kind of one-off 'premium' as a condition of any Government approvals (including changes to the companies' State Agreement Acts) that may be necessary to allow the companies to achieve the synergies from combining their iron ore operations..."
Mr McGowan said this means the government may be considering charging a fee in return for changing any State Agreement Acts that may be necessary for the joint venture business arrangement to take place.
He added that the government could also be considering retrospective amendments to Stamp Duty laws to make them apply to the arrangement, even if under existing laws the companies would not be liable.
The law allows the Commissioner for State Revenue to levy stamp duty if the BHP Rio Tinto proposal is contrived to avoid that duty. The alternative proposal for the government to act outside the law is, at best, clumsy and ill considered, Mr McGowan said.
"Such measures have the potential to derail a joint venture that has great significance for the state and national economy," Mr McGowan said.
"This document shows the Barnett Government is considering actions that would be more in line with those of a dictatorship or Hugo Chavez's Venezuela rather than those of a modern, investment-friendly democracy like Western Australia.
"Every investor or business in Australia should be concerned that the WA Government is considering acting outside existing laws and charging a fee on businesses to undertake their activities in this State.
"That fee could be in the order of up to $1billion."
Mr McGowan said he understood some people might think it is a good idea to charge major companies for such an arrangement. However, when such a proposal is not authorised by existing laws it is a dangerous and investment-threatening move.
"The State Opposition supports the prospective regularisation of royalty payments as a consequence of changes to State Agreement Acts and the resolution of issues such as third party access to rail lines in the Pilbara," Mr McGowan said.
"However it does not support the retrospective extortion of money from companies in order for them to do business in this State.
"That fact that Mr Barnett is considering these measures shows that his Government is a threat to business investment in Western Australia."
