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Parliamentary Questions


Question Without Notice No. 656 asked in the Legislative Council on 13 June 2019 by Hon Dr Steve Thomas

Parliament: 40 Session: 1

GST DISTRIBUTION — IRON ORE PRICE

656. Hon Dr STEVE THOMAS to the minister representing the Treasurer:

I refer to the answer to question without notice 13, asked on 12 February 2019, in which the minister told the house that ''A scenario where the average price of iron ore remains at $90 a tonne has not been modelled, as this assumption is highly unrealistic.'' It is now four months later.

(1) What is the current international price for iron ore in US dollars per tonne?

(2) Is the price listed in today's The West Australian of US$102.76 a tonne an accurate assessment?

(3) Given that the state budget released last month predicts iron ore prices this financial year of US$76.50 a tonne, and US$73.50 next financial year, how much additional revenue will the government receive each month above budget predictions if iron ore prices stay at the price of US$102 a tonne?

Hon STEPHEN DAWSON replied:

I thank the honourable member for some notice of the question. The following information has been provided to me by the Treasurer.

(1) The price was $US106.5 a tonne on 12 June 2019. The financial year to date average is $US78.6 a tonne.

(2) Yes. The price listed in The West Australian is unsourced, but appears to be the forward contract The Steel Index price for the end of June as quoted by CME Group, whereas the price quoted by the Department of Treasury in part (1) is the 12 June spot price, hence the difference.

(3) The revenue impact of a higher iron ore price cannot be determined without factoring in the impact of other variables, such as the exchange rate and iron ore export volumes. Neither the futures market nor the most recent Consensus Economics survey predict iron ore prices to average their currently elevated levels in 2019–20.