IRON ORE ROYALTY REVENUE
ASSUMPTIONS — 2019–20 STATE BUDGET
825. Hon PETER COLLIER to
the minister representing the Treasurer:
I ask this question on behalf of Hon
Dr Steve Thomas, who is away on urgent parliamentary business.
I refer to question without notice
759 asked last Thursday, 13 August 2020.
(1) What was the average spot price
of iron ore during the week since I asked that question?
(2) How much
higher than the 2019 budget estimate of 2020–21 iron ore prices is the
answer to part (1)?
(3) How much
higher than the 2019 budget and the 2019 midyear financial projections have
iron ore royalties been in the 2020 calendar year to date?
(4) I refer to
the social article in The West Australian of 19 March 2020, in which,
when the Treasurer was describing his daily
email of the iron ore spot price, he was quoted as saying, ''I can't
actually go to bed until I get that email'', and that at the
price in March, the paper suggested he ''could drift off to sleep
peacefully, counting leaping dollars instead of sheep''. To what extent
is the high iron ore price now propping up the government's budget and
its COVID-19 recovery plan?
Hon STEPHEN DAWSON
replied:
I
thank Hon Dr Steve Thomas for some notice of the question. The following
answer has been provided by the Treasurer.
(1) For the five
weekdays from 13 August 2020 to 19 August 2020, the iron ore spot price
averaged $US124.20 per tonne.
(2) The 2019–20
budget estimate for 2020–21 was $US65.60 per tonne. Given the movement
in the price of iron ore over the course of a year, comparing the average price
over a week with the forecast price over a year is not a meaningful comparison.
(3) As noted in
the response to question without notice 113 asked on 19 February 2020, royalty
revenue forecasts are based on whole financial years.
(4) Iron ore royalties represent only a portion of
general government revenue. State taxes, GST and other grants from the commonwealth also impact the state's
budget position. There is an inference from the honourable member's
question that the state's iron ore price forecast should be more
bullish. The honourable member may care to note that the commonwealth
government's forecast in its Mid-Year Economic and Fiscal
Outlook was an equivalent of $US63.90 a tonne in 2020–21, whereas
the state's midyear review estimate was $US66.20 a tonne.