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Prominent WA businessman and Wesfarmers chairman Michael Chaney has weighed into the debate against the Nationals' proposal to hike taxes for the state's two biggest iron ore miners.
Key points:
- A mining tax would not help WA because of GST arrangements, Wesfarmers' chair Michael Chaney says
- WA Nationals want to raise production levy from 25c a tonne to $5
- Chaney says BHP and Rio already pay other taxes, and the increase may see jobs go overseas
Nationals leader Brendon Grylls wants to hike production taxes for BHP Billiton and Rio Tinto from 25 cents to $5 a tonne, to raise an additional $7.2 billion over four years.
Wesfarmers chairman Michael Chaney told shareholders at the company's annual general meeting in Perth it was a "very bad idea" which would discourage investment and reduce employment.
"Today more than ever we need our political leaders to reject the populist approach and concentrate instead on developing policies that create long-term benefits for the community," Mr Chaney told shareholders.
After the meeting, Mr Chaney reiterated his comments to the media and said the move would make the nation's royalties seven times higher than those of Australia's main competitor, Brazil.
"That means more iron ore will be exported from Brazil, jobs will be lost here in Australia or not developed and it would be very bad for our economy," he said.
"Companies like BHP and Rio already pay vast amounts in royalties and taxes, about 20 dollars a tonne, not 25 cents," he said.
"It is a really unfortunate proposal, which is unlikely to be of any benefit to the state because of the GST sharing arrangement and would damage investment and damage people in the Pilbara.
"It hopefully won't see the light of day."
Trump threat to free trade 'risks Australian economy'
Mr Chaney also expressed concern about Donald Trump securing the US presidency.
"The biggest risk is if Mr Trump follows through on his promise to throw out trade agreements and to restrict trade, because history is whenever you have freer trade you have economic prosperity, increased employment, more jobs and an increased capacity of government to look after the disadvantaged," he said.
"If you restrict trade, you have the opposite of that, you end up having recessions and people thrown out of work.
"Australia has always relied on international trading for its prosperity, so any move to limit trade, to restrict trade, put tariffs on and so on with a country like Australia would be very damaging."
The company's directors were also forced to respond to shareholder concerns over the struggling diary industry.
Some WA dairy farmers have gone out of business while others are struggling to make ends meet as milk processors cut the price they pay for their milk.
One long-time shareholder stood up and asked the company to double the price it charges for milk in its stores.
But Wesfarmers managing director Richard Goyder said increasing the per litre price would not solve the problem.
"This isn't a simple issue of us just putting up the price of milk if we did that we'd just make more profit and we're about giving our many millions of customers great products at really great prices, Mr Goyder said.
"The issue with WA dairy farmers is a serious issue, it needs investment and probably some government help in doing that and certainly we'll play our part if that means committing to long-term supply arrangements."
Topics: business-economics-and-finance, mining-industry, tax, government-and-politics, wa
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