Coalition promises tax reform for exploration investors
IN THE LOBBY: The opening speeches at the Association of Mining and Exploration Companies (AMEC) conference in Perth included a juicy pre-election bone for the mining industry from the Coalition.
A Coalition spokesman told the conference it intends to introduce an Exploration Development Incentive, which will allow investors to deduct the expense of mining exploration against their taxable income.
The scheme would come into effect on 1 July 2014.
“This is fantastic news for the mineral exploration and mining industry throughout,” AMEC chief executive officer Simon Bennison said.
“AMEC has been advocating for a proactive tax reform measure that will allow current eligible losses to be passed back to their Australian share owners in the form of a tax credit through the well-known franking system.
“The Coalition has listened to industry and recognised the importance of such a policy and the role this plays in maintaining international competitiveness and investment in the exploration and mining industry.
“It will also increase the rate of discovery and lead to the mines of tomorrow, providing future revenue streams for governments.
“These proposed policy changes will assist in making Australia globally competitive once again and hopefully reduce the amount of capital raised in the exploration sector heading offshore.”
The Chamber of Minerals and Energy of Western Australia joined the cheer squad and shook its pom-poms in support scheme.
The CME said an Exploration Development Incentive would strengthen the pipeline to ensure future mining activity continues to underpin the growth of the Australian economy, allowing investors to deduct a proportion of mining exploration expenditure against their taxable income.
“CME has been calling for incentives, such as a mining exploration tax credit, to boost the critical minerals exploration sector,” CME chief executive Reg Howard-Smith said.
“We have seen the competitiveness of Australia as an attractive place for exploration expenditure decline with research showing Australia’s share of global exploration has reduced from 21 per cent in 2002 down to only 12 per cent in 2012.
“Exploration is the lifeblood of future industry. With sensible and encouraging policy initiatives such as the Exploration Development Incentive, there are positive signs for establishing the future pipeline of projects.”
CME said it will work closely with the next federal government to see such exploration incentive policies put in place for the benefit of the future growth of the resources sector and the Western Australian and Australian economies.