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Nahan rejects Nationals' 'crazy-brave' mining tax plan

Monday, 15 Aug 2016 12:09:50 | Andrew O'Connor

WA Treasurer Mike Nahan said a mining tax was not the solution to budget issues. (ABC News: Andrew O'Connor)

The WA Nationals' radical plan to impose a mining tax on BHP Billiton and Rio Tinto to help solve the state's GST shortfall has been labelled "crazy-brave" by the West Australian Treasurer.

New National leader Brendon Grylls has floated a plan for a $5 per tonne tax on the two mining giants, representing a 20-fold increase in an existing 25 cent per tonne production rental fee set in the current state agreements.

"Oh, crazy brave, we're not going to do that," Treasurer Mike Nahan said.

"We do not impose excessive taxation on the basic, the most important industry in this state, that is, mining."

The Treasurer and Nationals leader spoke briefly to reporters as they arrived for what was set to be a tense Cabinet meeting, the first since Mr Grylls' elevation to the Nationals' leadership.

Dr Nahan said taxing the big miners more was not a solution to the state's budget issues.

He said the Government already had a clear economic plan that was working to reduce expenditure and hold down public sector wages growth.

"We are the only party here, and we ask him to join us, in an alliance, with a coherent fiscal and economic strategy for this state," he said.

BHP is widely tipped to deliver a record loss approaching $10 billion in tomorrow's full-year results.

WA 'will ensure GST floor guarantee delivered'

Meanwhile, Dr Nahan said the Prime Minister's move to ensure a fairer distribution of GST was a "significant achievement" the Barnett Government would ensure was delivered.

At the weekend Malcolm Turnbull pledged to establish a minimum GST return share for states, to ensure the "unprecedented" collapse of WA's revenues was not repeated.

"He is the Prime Minister of Australia and he has to deal with members of his own party, Labor Party, and other leaders from other states and he has to bring them aligned, so he has to fight," Dr Nahan said.

"But we will be there, stiffening his backbone, making sure that he follows through on the proposal."

Head shot of WA Nationals Leader Brendon Grylls with another man in the background. Photo: Brendon Grylls says the Prime Minister must act now he has acknowledged the GST system is unfair. (ABC News: Andrew O'Connor)

But Mr Grylls dismissed the Prime Minister's GST proposal as a mere acknowledgement of the problem, and one that would actually exacerbate WA's disadvantage.

He said the plan would in fact benefit other states, and disadvantage WA, citing the example of New South Wales, currently enjoying a property boom, but facing a harsh GST reduction in coming years.

"From what I've seen of the proposal put forward, it would mean when Western Australia was meant to be seeing the GST come back into the system based on the formula, that the formula would actually penalise us and go against us," he said.

State conference shines light on alliance cracks

It was the first time the Treasurer and Nationals leader faced the media since enduring bruising speeches from the weekend Liberal Party state conference.

The yawning divisions between the Liberal and National alliance partners were on full display on Saturday as Liberal State President Norman Moore labelled Mr Gryll's plan "weird".

Liberal State Director Andrew Cox followed up with a broadside of his own, where he accused the new Nationals leader of dragging his party into the territory of the Greens.

"Mr Grylls will take his party further to the Left, economically and ideologically," he told the conference.

"It's getting harder and harder to work out the differences between the Nats and the Greens."

Mr Grylls did not take questions on those criticisms.

In response, he called on Malcolm Turnbull to deliver on his pledge.

"Now that the Prime Minister has defined the GST as unfair, be the Prime Minister and do something about it," he said.

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