PERTH (miningweekly.com) – The National Party of Western Australia’s proposed new tax on iron-ore could cost Australia about 13 500 jobs and will shrink the economy by about A$2.9-billion a year.
Commissioned by the Minerals Council of Australia (MCA), a research study by Deloitte Access Economic has found that the proposed tax will cost 2 900 jobs in the Pilbara, 3 400 in the broader West Australian economy and 7 200 jobs nationally.
Western Australian Nationals leader Brendon Grylls has proposed the tax, which will impose a A$5/t levy on iron-ore production from the Pilbara, with the aim of raising A$7.2-billion in state funds. Currently, iron-ore miners pay 25c/t.
Mining majors Rio Tinto and BHP Billiton, which rejected the proposed tax, have also warned that it will place jobs and competitiveness at risk.
The Deloitte report found that the A$2.3-billion-a-year tax will shrink the size of the economy by more than the revenue it will raise, and found that the proposed tax would lift the production costs of some Australian iron-ore producers without affecting their domestic and foreign competitors.
The impact will see the Australian economy eventually shrink by A$2.9-billion a year.
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