IRON ORE ROYALTY REVENUE
ASSUMPTIONS — 2019–20 STATE BUDGET
887. Hon PETER COLLIER to
the minister representing the Treasurer:
My question without notice is asked
on behalf of Hon Dr Steve Thomas, who is on urgent parliamentary business.
I refer to my question without
notice 825, asked on Thursday, 20 August 2020.
(1) What was the average spot price
of iron ore during the three weeks since I asked that question?
(2) How much higher than the 2019
budget estimate of 2020–21 iron ore prices is the answer to (1)?
(3) How much
higher than the 2019 budget and the 2019 midyear financial projections have
iron ore royalties been in the calendar year 2020 to date?
(4) How long would the price of iron ore have to stay
at the price given in (1) for the additional iron ore royalty revenue
above the 2019 budget estimate to pay entirely for the government's
$5.5 billion COVID-19 WA recovery plan?
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) For the 15
weekdays inclusive of 20 August 2020, the iron ore spot price averaged $US126.2
per tonne.
(2) The average
price over the past 15 weekdays is $US60.6 per tonne above the 2019–20
budget estimate for the whole 2020–21 financial year.
(3) Royalty revenue forecasts are
based on whole financial years, not calendar years.
(4) See answer to
(3). Also, iron ore prices are extremely volatile and can move significantly in
a short space of time. Furthermore, while royalty collections have been
supported recently by the higher iron ore price, other sources of revenue such as taxation revenue and GST grants are
expected to be significantly impacted by COVID-19.