The ABC’s Inside business show yesterday had an interview with the head of the Geraldton iron ore alliance, a group of miners starting up 5 iron ore mines inland from Geraldton in Western Australia. 15 Billion dollars of investment is on the line.
To give you an idea of the impact heres the companies own blurb on the impacts on the economy. Even allowing for the usual overstating of benefits its pretty considerable.
According to the report, key economic benefits from expanding iron ore mining in the region over a 25-year period has the potential to deliver:
- 1,360 jobs a year during construction;
- 4,254 direct jobs a year for a conservatively estimated 25-year operational period;
- A total of 12,000-plus direct and indirect jobs a year in WA from the increased economic activity;
- An addition of $1.5 billion a year to Gross State Product (the overall measure of WA’s economy); and
- About $7 billion in taxes and duties to the Federal Government and around $3.5 billion in royalties and other payments to the State Government.
Rudd wants more? If I do a rough calculation on the wages alone, based at a rate of $70,000 per year the mines would generate over $297 million dollars and at least a quarter of that flows to the government as increased tax/lessened dole payments.
The whole interview is well worth a watch, particularly for the body language of Mr Casello, the director of the alliance.
In a nutshell 5 seperate companies are developing mines in the same region, a Chinese consortium is building the rail links and I believe its a Japanese financed port project. All this has been in planning/development for over a decade now.
Watch this interview and tell me how likely it is to progress a lot further than it has.
They still dont even know where the tax will be applied, as the ore is dug up, processed, or shipped.
The uncertainty will kill the whole project, KRudd has applied buckets of it, and the promise of no certainty for months to come. As mentioned in the interview, there are vast parts of what the tax will affect which couldnt be talked about by the governments own consultative group.
The killer line is right at the end. “Theres very little value in getting tax out of something that doesnt go ahead”…..