BHP, Rio take on WA tax hike plan

WA’s mining lobby group has launched an unprecedented campaign in the lead-up to the state election.

The blitz is being jointly funded by the CME, its fellow lobby group the Minerals Council of Australia and BHP and Rio.Picture: Jack Atley/Bloomberg News.

Mining giants BHP Billiton and Rio Tinto will fund an unprecedented advertising campaign across Western Australia in the lead-up to the state’s election next month, as the miners amplify their attack on the WA Nationals’ proposed new tax.

The Chamber of Minerals and Energy Western Australia, a lobby group whose members include BHP and Rio, on Wednesday launched the advertising blitz that it said would spell out the facts about the miners’ tax contribution and the likely impact of the new impost.

The blitz is being jointly funded by the CME, its fellow lobby group the Minerals Council of Australia and BHP and Rio. While the industry has run campaigns before — most noticeably and successfully during its opposition to the first Rudd government’s resources super-profits tax — CME chief Reg Howard-Smith said it was the first time the group had advertised in the lead-up to an election.

WA Nationals leader Brendon Grylls has proposed hiking an obscure 25c a tonne production levy on BHP and Rio’s iron ore production to $5 a tonne.

The new tax would raise about $3 billion a year in new revenue for the state, although much of that would be redistributed to other states by the Commonwealth Grants Commission.

Mr Howard-Smith said the campaign, which would feature in newspapers, radio, television and online, aimed to inform the public about the tax contribution of the industry.

He conceded that the tax proposal had won popular support among voters, and that the industry had to demonstrate that its tax and royalty contributions went far beyond the 25c levy focused on by Mr Grylls.

The group said the total tax and royalty payments by the two mining behemoths equated to about $19 a tonne of iron ore ­production, with WA iron ore royalties already four times that of its biggest iron ore competitor Brazil.

Mr Grylls in response said the CME should not include royalties in with the total tax figures, noting that royalties were a business input cost “just as bricks are an input for a builder”.