Macrobusiness

How a National Export Volume Auction (NEVA) could help Western Australia.

The people of Western Australia have long been irritated by the entitled attitudes of the ‘Eastern States” and Canberra and often with good reason.

With the rise of neoliberalism,  the Australian economic model has become little more than a giant casino with Sydney and Melbourne the throbbing centers of private bank credit driven asset price speculation.   The inherent gravitation forces of this model have done little for regional Australia (including the smaller states) other than suck the best and brightest into its gaping maw.

For more on the disaster that is modern Australian economic management click here and here.

For why Australians and new immigrants are being sucked into the increasingly centralised and exploding #SardineSydney and #Hellbourne click here

The Glass Pyramid and Western Australia

While the Glass Pyramid remains a resource for all Australians, Glass Pyramid Head of Research has a soft spot for the long sandy beaches of the South West and it is from a warm furry paw that this post comes.

paddle-wheel-1051962_1280

Show us the money!

One of the long standing grievances of Western Australians is that they generally see too little of the income generated by the mineral exports from Western Australia and the return of income from other taxes raised by the Federal Government… like GST.

Despite having some of the largest holes on the planet gouged out of the northern parts of Western Australia and being required to work long stretches on a flight in flight out basis, the Eastern State folk reckon that this should not count for much as they spend their days shuffling paper and speculating with private bank credit on land prices around Sydney Harbour and the Yarra River.

Western Australians understand that their sweat and hard work is being used by the Eastern States to support their foreign debt leveraged ‘asset punts’ and unproductive speculations.

The solution is a National Export Volume Auction

For full details of what a NEVA is and how it could operate click here.

https://theglass-pyramid.com/2015/05/29/iron-ore-a-national-iron-ore-export-volume-auction-is-the-best-solution/

In summary how it could work for Western Australia is as follows.

  • Western Australia will continue to impose state royalties and other charges on mineral exploitation.
  • As mining royalties are state incomes protected by the Constitution they will continue to have priority and protection.
  • A National Export Volume Auction (NEVA) works harmoniously with the state royalty regimes and ensures,  by having our mining contractors competitively bid for the right to export mineral volumes, that Australia is not selling ores into the international market below the lowest cost of our nearest international competition.
  • This means that the total return to Australia from mining in Australia is maximised.   More money is returned to all Australians and that means more is available to share around, keeping in mind that state royalties retain their priority.
  • Most importantly, the NEVA auction results will provide excellent guidance to the state governments as to the need for adjustments to their royalty rates.
  • NEVA auction prices will be a very useful indicator to the states as to whether there is room to increase their royalties.
  • Ultimately, a perfectly priced state government royalty will leave little on the table for the National Export Volume Auction as the miners will only be willing to bid a small amount if they are to compete with our nearest lowest cost international competitors.

Certainly, Western Australia will still find the Eastern States determined to grab what they can and they will try to deny Western Australia its rightful share of Federal tax collections that have been extracted from the people of Western Australia, but it will be harder to do so and in any event Western Australia will have established control via an improved and maximised royalty regime on the income from mineral exports from Western Australia.

What is the catch?

Sadly there are a lot of traitors in Western Australia who feign loyalty to the Black Swan but whose first loyalty is really to foreign multinational mining contractors.

swan-3340932_1280

They will argue that Western Australians should deny themselves full and proper royalty incomes from mineral exploitation in Western Australia on the basis that the miners already pay ‘enough’.    The miners have ‘paid enough’ when they are paying what they need to in a competitive auction of the rights to export Western Australia’s mineral wealth.

So Western Australians should be wary of those in their midst who proclaim that Western Australians will get ‘more’ if the international miners pay ‘less’.

West Australia standing up to the Eastern States and the international mining conglomerations is what the National Export Volume Auction model allows.

Categories: Macrobusiness

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