IRON ORE ROYALTY REVENUE
1196. Hon Dr STEVE THOMAS to the minister representing the
Treasurer:
It is good to be back! I refer to
the 2018–19 to 2020–21 mini boom in iron ore royalties.
(1) What is the current spot price
of iron ore as measured by the government?
(2) What was the average iron ore
spot price from 1 July 2020 to 31 October 2020?
(3) What is the
difference between the answer to (2) and the 2020–21 budget price of
$US96.60 a tonne?
(4) How much additional iron ore royalty revenue has the
government received —
(a) in 2018–19 above the 2018
budget expectation;
(b) in 2019–20 above the 2019
budget expectation; and
(c) in 2020–21 to date above
the 2020 budget expected income to date?
Hon
STEPHEN DAWSON replied:
I thank Hon Dr Steve Thomas for
some notice of the question. The following answer has been provided to me by
the Treasurer.
(1) It is $US119.15 per tonne.
(2) It was $US118.2 per tonne.
(3) The answer to (2) is the average over a four-month
period, whereas the budget forecast is a 12-month average.
(4) (a)–(c)
In 2017–18, iron ore royalties were
$80 million lower than the original budget estimate; in 2018–19,
$1.722 billion higher; and in 2019–20,
$2.199 billion higher. An update on the revenue collections for 2020–21 will be provided in the
midyear review in December. All this information is available on the
Treasury website.
Iron ore royalty revenue is only one
of many sources of government revenue that may move up or down. The McGowan
government's budget is based on a prudent iron ore methodology given that history has shown that iron ore prices are
very volatile. This seeks to ensure that the government lives within its
means. As a responsible Treasurer, I make no apology for making conservative revenue assumptions in my budgets. In the case of
iron ore, price assumptions are consistent with commonwealth forecasts.
I do not intend to repeat the mistakes of the former Liberal–National
government and lock in high revenue assumptions based on a temporary spike in
iron ore prices. It was this cavalier approach to public finance by the former
Liberal–National government that delivered nine budgets with nine cash
deficits totalling $27.8 billion.