The Nationals formally announced yesterday that it would try to block the legislation, on the grounds that it would destroy jobs.
Party leader Mia Davies said Mark McGowan’s Labor government had broken two key election promises while delivering little benefit to repairing Western Australia’s crippled finances.
She said increases in gold royalties and payroll tax would have a “drastic” effect on employment.
However, it was the Nationals, under former leader Brendan Grylls, that campaigned for the March state election on the platform of lifting iron ore rental rates paid by BHP and Rio Tinto.
But Davies said the McGowan plans would raise just $827 million over four years, compared to the $7.2 billion estimated to have been raised under the iron ore plan.
“Unlike the McGowan government’s tax on the gold sector and payroll tax hike, the Nationals had the courage to take our plan to the people of Western Australia. We laid our cards on the table,” she said.
Davies said BHP and Rio posted billions of dollars in profits, but the McGowan government had been “too afraid” to ask them to assist with budget repair.
“Instead, the Premier wants to slap a 50% royalty increase on gold miners, which have comparatively small profit margins. This will curtail exploration in the gold sector and derail expansion plans,” Davies said.
“Labor has proven that election promises mean nothing, unless those promises are made to BHP and Rio Tinto.”
However, as two of the state’s largest employers, BHP and Rio will be heavily impacted by the increase in payroll tax.
Pitcher Partners Perth managing director Leon Mok said the measures targeted the green shoots in the WA economy, with the big end of town to be hit by the payroll tax increases and the royalty rise to target one of the few positive areas of the state’s mining sector.
“It appears that tall poppy syndrome has once again hit,” he said.
“These royalty increases send mixed-messages to businesses and investors who will increasingly think that success equates to having the goal posts shifted and additional taxes being imposed.”
The Chamber of Minerals and Energy ran a full-page ad in Saturday’s Weekend West showing McGowan protesting against a royalty increase in late 2014, but the sector is yet to commit to a broader campaign.
