Iron ore inquiry would have done more harm than good, Prime Minister Tony Abbott says

Updated

Prime Minister Tony Abbott says the Federal Government decided not to hold a parliamentary inquiry into the iron ore industry in the belief it would have done "more harm than good".

The Government had been considering a parliamentary inquiry to examine claims by the Fortescue Metals Group that big miners BHP Billiton and Rio Tinto are deliberately ramping up iron ore production to drive down prices.

Treasurer Joe Hockey yesterday released a two-line statement that said it would not go ahead, ending days of internal debate and mixed public messages on the issue.

Speaking in Tasmania this morning, the Prime Minister said the decision was made following consultation with industry.

"We carefully thought it through, we talked to all the various players in the sector and in the end came to the conclusion that a parliamentary inquiry would do more harm than good," he said.

"We were attracted to an inquiry, no doubt about that.

"We talked to the various people in the sector and came to the conclusion, after the sort of consultation which sensible governments do, that a parliamentary inquiry was going to generate more heat than light. So we've decided not to go ahead with it."

Mr Abbott had previously indicated his support for the proposal, telling Macquarie Radio "I think we do need an inquiry".

That prompted a furious response from the big miners, with BHP Billiton chief executive Andrew Mackenzie labelling the proposal a "ridiculous waste of taxpayers' money" that would send the wrong message to Australia's trading partners.

Mr Abbott started distancing himself from the idea following those comments, warning of a "one-sided" investigation that could "degenerate into a witch-hunt" against the big miners.

Criticism over decision, detriment to mining industry

Independent senator Nick Xenophon has been pushing for an inquiry and met the Treasurer to discuss the proposal last week.

He has criticised the Government's decision saying the inquiry has been "killed off by a shock and ore campaign by key elements of the mining industry".

"The fact that the PM and the Treasurer were initially supportive of an inquiry by both houses of Parliament and have now backed away, is indicative, yet again, of the enormous and disproportionate power of the mining lobby," Mr Xenophon said.

"The iron ore giants have now succeeded in censoring the Government and the Parliament from having an inquiry into issues that are clearly in the national interest.

"You've got to ask, given this extraordinary turn of events: where does the real power lie in this country?"

Sorry, this video has expired Video: Andrew Forrest is still pushing for a hard look at the industry (The Business)

Opposition Leader Bill Shorten slammed the Government's handling of the issue, saying there was "no doubt" that the Prime Minister's actions had damaged the industry.

"This has been a debacle entirely of the Government's own making," Mr Shorten said in a statement.

Fortescue chairman Andrew Forrest said the level of lobbying from lobbyists against in inquiry was "unprecedented" and he "wasn't unduly surprised, unfortunately, that the Government backed off the inquiry".

"I just want transparency, I believe there's answers here which people should hear," he told The Business.

"The people of Australia know this is their most important export industry."

Mr Abbott said he was confident the competition watchdog would take appropriate action if any price-manipulation was detected.

"We do have the ACCC, which is very good at policing that kind of misbehaviour.

"The last thing we want to see is any predatory behaviour in any market, particularly a market that's so important for our country and our long term future."

Topics: mining-industry, government-and-politics, federal-government, australia

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