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Grylls firm on mining tax despite GST plan

AAP logoAAP 15/08/2016

WA Nationals leader Brendon Grylls won't back down on his plan to slug BHP Billiton and Rio Tinto higher iron ore charges, despite the prime minister pledging to improve the state's GST share.

Mr Grylls proposes increasing the charge from 25 cents to $5 per tonne to help fix WA's ailing finances, but last week said that may not be necessary if the state secures a bigger slice of the GST.

Prime Minister Malcolm Turnbull told the WA Liberal state conference on Saturday that he wanted to put in a floor to how low a state's share of the GST could fall, after the west's take dropped to about 30 cents for every dollar it generated.

"I won't be dumping the Nationals' policy," Mr Grylls told reporters on Monday.

"We've been working on it for well over a year.

"We believe it's a fair policy."

Mr Grylls said the charge hadn't increased since it was introduced in the 1960s, and while he welcomed Mr Turnbull's acknowledgement WA's GST share was unfair, there were no increases in the budget forward estimates.

"If you're going to wait for WA's share under the current formula to come back to a certain level and then put a floor under it, Western Australia will be disadvantaged," he said.

"It would mean that when WA was meant to be seeing the GST come back ... the formula would actually penalise us and go against us."

His proposal for increasing BHP Billiton and Rio Tinto's special lease levy, however, would improve the state's balance sheet immediately.

Federal Social Services Minister Christian Porter, who was previously the WA treasurer, told ABC radio on Monday that 2019-20 was the "target point" for any changes to the GST.

"The floor is not yet known," Mr Porter said.

"That's a matter of negotiation with all of the other states and territories."

WA Treasurer Mike Nahan labelled Mr Grylls' mining tax plan "crazy brave" and said the Liberals would not back it, adding the Pilbara MP's return to cabinet had caused tensions.

"We're not going to do that - we do not impose excessive taxation on the most important industry in this state," Dr Nahan said.

Opposition Leader Bill Shorten dismissed Mr Turnbull's suggestion as a thought bubble that aimed to improve his party's chances in the state election in March.

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