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WA budget big on infrastructure bucks

The state government announced today it would commit $339 million towards common-user infrastructure at the Oakajee Port development in the Mid West region. “The government has been working closely with Oakajee Port and Rail to strengthen the viability of a major new iron ore export province in the state’s Mid West and lay the groundwork for broader industrial development in the future,” it said in the budget overview. The Royalties for Regions program received $897 million to be spent in 2010-11, with a total of $3.7 billion over the four years to 2013-14.A major winner was the Pilbara Cities Initiative in the northwest, which will receive $977 million in funding up to the end of 2013-14. “Pilbara Cities funding includes $310 million ($20 million in 2010-11) to partner with the Commonwealth government and the private sector on major infrastructure projects, such as power and water supply,” the budget said. The government recently announced it would provide $30 million for the state’s first-ever service workers apartment precinct in Karratha for up to 250 people, providing rental accommodation for non-resources sector employees.There was also a focus on improving safety in the resources sector, with funds approved for an additional 37 full-time employees in 2010 and 35 full-time employees in 2011 to support an improved safety service delivery to the sector.The WA budget also outlined an annual allocation of $700,000 to establish world’s best-practice regulation of the state’s uranium mining industry.Funding allocated to the Department of Mines and Petroleum for uranium mining and exploration will provide $300,000 in operational funding, while the remaining $400,000 will fund three positions to ensure delivery of best-practice regulatory services. In the Goldfields-Esperance region, just under $6 million has been allocated to the Esperance Port for work such as the Port Access project, while an extra $220,000 has been found for the Miners and Prospectors’ Hall of Fame in Kalgoorlie.Chamber of Minerals and Energy of Western Australia chief executive Reg Howard-Smith welcomed the infrastructure funding for Oakajee Port along with a 330kV power transmission line from Pinjar to Eneabba. “The new transmission line is a key step in establishing the Mid West as the state’s next great iron ore province,” he said.“Funding for Oakajee and the provision of vital electricity infrastructure is pivotal in building the confidence of the region’s iron ore players to push ahead with their projects.”In addition, royalty income would rise $1 billion to $3.27 billion in 2010-11 and then rise to $3.67 billion in 2012-13.Speculation had been rife that Premier Colin Barnett was intending to raise the royalties BHP Billiton and Rio Tinto have to pay on fines operations.But any talk of a royalty rate hike was absent, confirming that the increased slug to royalties has been put on hold for now. Mining approvalsThe government’s focus on reform in mining approvals attracted $8 million over the next four years in the state budget. Mines and Petroleum Minister Norman Moore said the reform was an urgent response to rapid growth in Western Australia’s mining industry. “Establishing a new integrated single approvals system that can deliver necessary approvals within an acceptable timeframe and cost to proponents and across government agencies is vital,” he said. “This system, which is already underway and will be further improved by this injection of funds, will improve efficiencies and costs in the management of mining and petroleum approvals.” Moore said further development of IT systems within the Department of Mines and Petroleum would enable more companies to lodge, track and pay for approvals online.“Streamlining the approvals systems is consistent with best practice and provides greater transparency to the public and industry, while enabling departmental staff to dedicate more time to processing approvals,” he said. The new integrated single approvals system will capitalise on existing systems which currently allow industry to track the progress of most applications lodged with the department across all the business units.Impact of super-profits taxWhile royalties from the state’s mining sector are expected to rise $1 billion in 2010-11, the so-called super-profits tax will have a serious impact on state growth, the WA government said as it handed down the budget.In his speech, Barnett said business investment was forecast to rise 11.5% in 2010-11 and 12.25% in 2011-12 as major international mining and petroleum companies advanced their projects in Western Australia.However, those forecasts had been finalised before the federal government revealed its plans to introduce a resource rent tax.“The prospect of this new tax on businesses large and small has already impacted the outlook for Western Australia’s growth and will inevitably impact jobs growth,” Barnett said. The CME’s Howard-Smith echoed the views of the premier. “This budget clearly shows the strong contribution the resource sector is making to the WA economy,” he said.“A resource tax would throw these projections into disarray and have a serious impact on state growth.“For now though, the state’s finances remain healthy and the triple-A credit rating secure.”

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