CME rejects Premier’s view on resources’ contribution

Chief executive Reg Howard-Smith said now is the time for the state government to have consultative talks with the sector to work through issues around royalties and government revenue.
“The resources sector makes a very significant contribution to the state and federal governments and Western Australian communities through employment and a wide range of positive initiatives.
“Suggestions that the sector is under taxed or has not paid its way is simply wrong”, Howard-Smith said.
According to the CME, state government revenue from royalties in 2008-2009 was $3.2 billion, representing an increase of almost $2 billion over the past five years.
“Other state and federal government revenues paid by the resources sector either directly or indirectly are significant,” Howard-Smith said.
“The state government has also increased its revenue from industry sources through the new $40 million mine safety levy, with other charges currently also being considered.
“We are greatly concerned about an adhoc and cost burden approach on the resources sector, particularly in the absence of any consultation or impact assessment by government,” said Howard-Smith.
He said the WA government runs a real risk of increasing cost imposts on the resources sector to the point of damaging investment decisions.
“Industry is concerned that for the state government to proceed on a matter like this without industry consultation could undermine the confidence in the state’s ability to create a stable investment environment, critical for multi-billion dollar investment decisions.
“It is important for the government to appreciate the recovery is not uniform across the sector. Raising royalties unilaterally without understanding the impacts on investment and operational costs could jeopardise some sectors viability and employment potential.
Rather than add further costs burdens to industry, the CME said the Premier’s attention should be on his recent commitment to keep a tight rein on the state’s finances and focus on delivering services more efficiently.
“The resources sector continues to be a major employer in regional areas, directly employing more than 80,500 in 2008-09 with considerable employment growth forecast to support significant approved and planned project developments. A further 250,000 West Australians are indirectly employed as a result of the sector,” said Howard-Smith.