POTASH ROYALTY RATE
1094. Hon Dr STEVE THOMAS to the minister representing the
Minister for Mines and Petroleum:
I refer to recent media that
indicates that the government is considering or planning to raise the royalty
rate on the much needed fertiliser potash.
(1) Is the government considering or
planning to increase the royalty rate on potash?
(2) If no to (1), will the minister
commit to maintaining the rate at its current level of 73� a tonne?
(3) If yes to (1), what rate of royalty
is being considered?
(4) If yes to (1), when will the new
rate be applied?
(5) If yes to
(1), why is the government making it harder for hardworking Western Australian
farmers to stay competitive?
Hon
ALANNAH MacTIERNAN replied:
I thank the member for the question.
The following information has been provided to me by the Minister for Mines and
Petroleum.
The
government has already taken the following actions to assist the emerging
potash industry. It has reduced the mining tenement rental from $22 per hectare
to $2.60 per hectare, amounting to a saving of $174 000 for 10 000 hectares. It
has created a specific mining rehabilitation fund levy, recognising that these
potash projects are long lived, thus reducing their annual costs from $50 000
per hectare to $20 000 per hectare for minerals in brine evaporation ponds. The
Minister for Mines and Petroleum has also provided letters to banks on the cost
of mining tenement rentals to make sure that lenders know the tenure
requirements.
(1) No.
(2) The rate of 73� a tonne is for
salt—NaCl, sodium chloride—not sulphate of potash, SOP.
(3) The royalty rate applying to SOP
has not changed since the Barnett Liberal government.
(4) Not applicable.
(5) All current
potash projects in development are focused on exporting and although the
government of Western Australia expects
that, at a future date, potash projects may begin providing domestic
consumption, we support the export
industry. An ad valorem royalty cannot increase prices because they are paid on
the realised market price and not in addition to the market commodity
price, unlike a value-added tax.