ABC News Radio

SUBJECTS: Olympic Dam

E&OE………

Marius Benson: Christopher Pyne, good morning.

Christopher Pyne: Good morning Marius.

Benson: You were making the point this is very disappointing news, specifically for South Australia, but is there support generally for the Opposition contention it is the carbon tax to blame?

Pyne: Not just the carbon tax, Marius. The company and all the analysts pointed to high development costs in Australia for mining projects and high development costs is another phrase for carbon taxes, mining taxes, uncertainty over accelerated depreciation, uncertainty over the diseal fuel tax rebate and the high cost of doing business in general, which in Australia has been rising for several years with strangling red tape and green tape on major projects and also of course the sometimes quite illegitimate demands of the unions on green field sites like this one. That’s definitely one of the reasons Olympic Dam is not going ahead. I don’t say that with any joy. I say it more in sorrow than anger. It’s obviously a complete catastrophe for my state of South Australia.

Benson: But when Marius Kloppers, the CEO of BHP, was yesterday giving his account of the reasons behind the BHP decision, he wasn’t siting a litany of taxes; he was talking about rising construction costs, weak commodity prices and higher capital costs. No specific mention of a carbon tax and no mention of taxes generally.

Pyne: Higher construction costs and higher capital costs are euphemisms for doing business in Australia being more expensive. To give you one example the carbon tax on removing the soil above the ore body at Olympic Dam is $50 million on its own, $50 million from the carbon tax on removing the soil on top of the ore body. When business people talk about capital costs and development costs, that’s what they’re talking about.

By the way I wouldn’t expect Marius Kloppers or any other businessman to specifically blame the Federal Government. They have to work with the Federal Government all the time, but in the company statement they specifically praised the state government of South Australia for the assistance they’ve been given and absolutely pointedly did not mention the Federal Government

Benson: When you say it’s pointed that he didn’t mention the Federal Government and you understand his lack of criticism of the Federal Government. Why should Marius Kloppers be so concerned about flattering the Federal Government? In fact isn’t he under a legal obligation to be frank about the reasons behind this as a public company?

Pyne: And he has been. He talked of high capital costs and high development costs. The carbon tax, the mining tax, the red tape and the green tape the Government has introduced over five years to please their Greens partners in many cases are adding to the development costs and the capital costs of doing business in Australia.

Benson: But isn’t that a very political reading between the lines to serve a narrow partisan purpose on your part?

Pyne: No, Marius, I think quite the opposite. As a statement of fact anybody who tries to pretend that’s not the case is quite frankly trying to gild the lily on behalf of a failing and incompetent government which has just overseen the shelving of the biggest mine, not just in Australia by the way, but in the world, by the biggest miner in the world.

Benson: Christopher Pyne, thank you very much for your time this morning.

Pyne: It’s a pleasure.

ENDS