MINING ROYALTIES

The Hon. R.I. LUCAS (16:53): I seek leave to make a brief explanation before asking the Leader of the Government a question about the subject of the Rann government perception, broken promises and lack of political integrity.

Leave granted.

The Hon. R.I. LUCAS: It may be a long explanation.

Members interjecting:

The PRESIDENT: Order!

The Hon. R.I. LUCAS: On 9 February this year minister Holloway issued a press release headed 'Libs need to come clean on royalties'. The minister said:

'Ms Redmond is giving out every signal that should the Liberals get into government she intends jacking up royalty rates for mining operations in this state,' Mr Holloway says. 'Thousands of jobs and hundreds of millions of dollars of export earnings are now at risk with Ms Redmond questioning what she believes is a low royalty rate on mine production. Mining companies have the right to know how much extra they would be paying under the Liberals.'

That was a somewhat embarrassing press statement from minister Holloway. Earlier this week, as my colleague the Hon. Mr Dawkins indicated, the Treasurer let the cat out of the bag when he indicated that the Rann government was implementing a view of increasing royalties right across the board, not just in relation to Olympic Dam, and said that they had been working on it for some time, in particular with the Sustainable Budget Commission as well. My questions to the minister are:

1. Given the minister's statements of February this year, just prior to the election, does the minister agree that this increase in royalties, as proposed by the Rann government and also the federal government, will mean—and I quote him—'the thousands of jobs and hundreds of millions of dollars of export earnings are now at risk as a result of the proposal to increase royalty rates right across the board in South Australia'?

2. When the minister made this duplicitous statement on 9 February, was he aware at that time that his own government, his own ministers, had the intention of increasing royalties right across the board in South Australia?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Industrial Relations, Minister Assisting the Premier in Public Sector Management) (16:56): I thought I answered that question earlier: any increase in royalties can only come through this parliament. It is part of the Mining Act, and I thought I had also answered the point specifically that, where the government had been looking at any increase in royalties, it had been well known publicly and discussed. I gave the two examples of the relevant companies for many months. I have also made—

The Hon. R.I. Lucas interjecting:

The Hon. P. HOLLOWAY: The Liberal Party and the Leader of the Opposition during the election campaign were comparing the royalties we had applied in relation to base metals—

The Hon. R.I. Lucas interjecting:

The PRESIDENT: Order! The Hon. Mr Lucas will come to order. He is setting a very bad example for our new colleagues. I remind members that it is a generous question time today—it is not always like this—so interjections of the nature being made by the Hon. Mr Lucas waste the hour you get on a normal day. I ask members to refrain from learning anything from the Hon. Mr Lucas.

The Hon. P. HOLLOWAY: I was making the point at the time that the Leader of the Opposition had been mistakenly comparing the rates that apply to base metals. As I explained earlier, copper sells for about $8,000 a tonne and iron ore just $100 or so a tonne, the same as coal. You cannot compare the royalties in this state on base metals with those that apply to bulk commodities. That was the point I was making. I explained in the answer I gave earlier that, in relation to the royalties that apply in relation to Olympic Dam, it is a special case.

We will lose thousands of jobs if the processing of those minerals is not undertaken onshore. If that was the proposal for expansion, we would need to balance it up with royalties: quite a different thing from what the Leader of the Opposition was saying before the election when she was erroneously comparing the royalty rates for bulk commodities, such as coal and iron ore, in other states with those that apply here in this state. I have indicated what this state's intention was in relation to those royalties covered by indentures and we have been discussing those with the companies concerned for many months now.