Clive Palmer’s brawl with China hurting economy, says Colin Barnett

CLIVE Palmer is damaging relations with China and harming the national economy, WA Premier Colin Barnett ­declared yesterday.

CLIVE Palmer is damaging relations with China and harming the national economy, West Australian Premier Colin Barnett ­declared yesterday in a blistering attack on the man who will hold the balance of power in the Senate.

In remarks that will further ­inflame tensions between the ­Liberal Party and Palmer United Party ahead of negotiations over the federal budget, Mr Barnett savaged Mr Palmer’s conduct ­towards his Chinese partners in the Sino Iron project in Western Australia, accusing him of acting “unfairly”.

The Premier said Mr Palmer’s ongoing series of legal battles with Hong Kong’s Citic Pacific, which has spent an estimated $10 billion building the Sino Iron project in the state’s northwest, had hurt Australia’s economic interests and its reputation in China.

“Clive has damaged our relationship with China,” Mr Barnett said. “I spend a lot of my time as Premier ensuring that that damage is kept to an absolute minimum.”

Mr Palmer’s willingness to pursue matters through the courts had added to the ill will between him, Citic Pacific and the West Australian government, Mr Barnett said. “He is by nature litigious. He will sue anyone at the drop of a hanky, that’s what he is like,” he said.

The comments have the potential to affect negotiations between the federal Coalition and the PUP, which will hold the balance of power in the Senate from July 1.

Mr Palmer said yesterday the party, which will have three senators and an agreement to work with the Australian Motoring Enthusiast Party’s Ricky Muir, would not talk to the government until it understood the legislation being proposed.

“They refused to recognise us as a party, they’ve refused to give us any parliamentary resources that can be used to analyse what’s in some of these bills. And I think it’s unreasonable to expect that we’ll just agree with everything they want to do without knowing what it is,’’ Mr Palmer told Sky News. Mr Palmer signalled his party would not back any changes to pensions or the proposed $7 co-payment for GP visits, and was “very sceptical” about changes to family payments.

The ongoing series of legal battles between Citic and Mr Palmer also come at a sensitive time for the economy, the price of iron ore — Australia’s most valuable export — having fallen sharply this year as new sources of supply swamp China’s moderating appetite for the commodity.

China is Australia’s largest trading partner, consuming more than $100 billion of exports from Australia last year — more than twice as much as Australia exported to its next biggest trading partner, Japan.

A series of major cost overruns and delays at Sino Iron have been exacerbated by numerous court cases between Citic and Mr Palmer, most of which are still ­ongoing. Citic has accused Mr Palmer’s company, Mineralogy, of siphoning more than $12m from an account set aside to run a port connected to the project, with some of the funds allegedly used to cover PUP’s election campaign expenses last year. Mr Palmer told the ABC last week the claim “doesn’t seem to have any substance”. The Sino Iron project finally began production late last year, about four years late and billions of dollars over budget.

“To put it bluntly, the Chinese hate Clive Palmer,” Mr Barnett said. “In their view, and I think they are right, he’s taking unfair advantage of an agreement ... and he is trying to get more money out of them than was originally negotiated.”

Mr Palmer had damaged relations with China and hurt WA’s economic interests by failing to act in the goodwill of the agreements between his Mineralogy, Citic and the state, Mr Barnett said. “He’s used his position, I think, perhaps not improperly, but unfairly to make it extremely difficult for the Chinese group that bought those rights to actually make their project work successfully,” he said. “He’s trying to scrounge out every last dollar out of it.”

Speaking on Sky News, Mr Palmer said it was “not true” that his ongoing legal disputes with Citic had affected relations with China. “What Colin Barnett’s worried about is he’s acted improperly and he knows he’s exposed himself to a large legal action and large debt because he’s done the wrong thing,” he said. “As an Australian premier he’s supported a foreign government doing things which are not in the interests of Australia. He hasn’t stuck up for Australians.”

Mr Barnett’s involvement with Mr Palmer dates back to the 1990s, when as a minister he was involved in the negotiation of a State Agreement over the Sino Iron project. The state agreement with Mr Palmer’s company Mineralogy included requirements that the Cape Preston port servicing the project be available for use by other parties. “Clive is doing everything he can to stop access to that port to others,” he said. “That is not the spirit of the agreement.”

Mr Barnett said he did not like the way Mr Palmer conducted himself. “I spent hours and hours negotiating issues with Clive in good faith, then you find he will then try and exploit any small discrepancy and he’s doing that in terms of the relationship with Chinese investors in our iron ore industry. It’s not doing this state any good at all,” he said.

“So, Clive’s put himself into a very difficult position. He’s a very successful, very aggressive businessman. But he’s now elected to a parliament so he has to put the public interest before his interest. I’ll be interested, very interested to see if he does that.”