IRON ORE ROYALTY REVENUE
1531. Hon Dr STEVE THOMAS to the minister representing the
Treasurer:
I
refer to the answers to my questions without notice 13, 80, 656, 938, 961,
1142, 1362, 1400, 1440 and 1460 of this year, on the 2019 mini boom of
iron ore royalties, and the Quarterly Financial Results Report of
September 2019, released on Friday, 29 November 2019.
(1) Does the Quarterly Financial Results Report
confirm a higher royalty income for the quarter to September of $840 million?
(2) Does the Quarterly
Financial Results Report confirm that the royalty income was boosted by the
impact of supply disruptions from a tailings dam disaster at a Brazilian mine
site in early 2019?
(3) Does the Quarterly
Financial Results Report confirm that the benchmark iron ore price averaged
$US101.40 a tonne in the three months to 30 September 2019?
(4) In answer to question without
notice 13 on 12 February the Treasurer stated —
A scenario where the average price of
iron ore remains at $90 a tonne has not been modelled, as this assumption is
highly unrealistic.
Does the Treasurer now acknowledge
that this answer has been proven to be incorrect?
(5) Will the
Treasurer now concede that the windfall of revenue he has received from the
2019 mini boom of iron ore royalties—$1.7 billion until 30 June 2019
and approximately $570 million over the budget estimate from 1 July to 30
September 2019—has given him a $2.27 billion bonus that was not
budgeted for in 2019?
The PRESIDENT: That was a very
long question. Minister for Environment, I look forward to your response.
Hon
STEPHEN DAWSON replied:
Indeed it was a very long question.
I thank the honourable member for some notice of the question. The following
answer has been provided by the Treasurer.
(1)–(3) The
honourable member should consult the publicly available Quarterly Financial
Results Report. Notably, the report illustrates how sharply the iron ore
price has fallen since peaking.
(4) No. The iron
ore price is trending down and the latest derivatives pricing suggests that the
price will continue to fall. This is another
pertinent example of the importance of the McGowan government's careful
fiscal management and why the Liberal Party's fiscal ineptitude and
failure to learn from its mistakes is an ongoing threat to the state's
finances.
(5) It is no
secret that the average iron ore price over 2018–19 of $US80.40 a tonne
was slightly higher than the average price of $US76.50 estimated in this year's
budget. An updated iron ore price assumption for 2019–20 and the impact of that on royalty income will be disclosed
in the 2019–20 Government Mid-year Financial
Projections Statement later this month.