Joe keeps promise to miners

IN THE LOBBY: While the bulk of the country’s lobby groups bewailed measures lined up in Joe Hockey’s budget the Association of Mining and Exploration Companies (AMEC) said one decision would go a long way to restoring Australia’s reputation for investment in mining and exploration.

Keeping to his group’s ideals AMEC Chief Executive Officer Simon Bennison was licking his lips in anticipation of the repeal of the carbon and mining taxes by the Senate, which he said would send the message that Australia is a safe place in which to invest.

“Australia does not have a monopoly on the world’s resources,” Bennison said.

“Stable public policy settings are essential for long term strategic investment and business decisions in the Australian mining sector.

“The industry is therefore extremely pleased that the Government has not heeded to the uninformed and unhelpful calls by the Greens to scrap the much needed diesel fuel tax credit arrangements that have applied for ‘off road use’ in the agriculture, forestry, fishing and mining sectors for decades.”

“AMEC suggests this must go further and continues to call for the diesel fuel tax credit arrangements to be at least returned to pre-carbon tax levels as proposed in the repeal of the carbon tax package, and then tied to any changes in the excise levy.”

Bennison went on to identify further budget related initiatives, he said will reduce red tape, improve efficiency and reduce duplication in environmental approvals are all supported by the mining industry.

This includes the implementation of the ‘one stop shop’ for environmental approvals, which AMEC hopes will remove duplicative processes between the Federal Government and those of respective State and Territory Governments.

One aspect of the budget that didn’t let the mining industry down was the government upholding its pre-election commitment to introduce an Exploration Development Incentive (EDI) from 1 July 2014 that will allow investors to deduct the expense of mineral exploration against their taxable income.

The initiative is similar to the flow through share scheme that has operated in Canada for years and has been a long time coming with governments of all persuasion ignoring industry pleas.

An incentive scheme was part of the campaign of the Rudd government during its 2007 campaigning, which it subsequently reneged on in order to introduce its ill-fated Resources Super Profits Tax.

“AMEC has been a vocal supporter of this initiative,” Bennison said.

“The EDI will go a long way towards addressing low new discovery rates, an ongoing reduction in Australian greenfield exploration activities and a low number of Initial Public Offerings for mineral projects in Australia.

“It will help Australia to regain international competitiveness and increase its share of global exploration expenditure.
At the RIU Sydney Resources Roundup, AMEC president Will Robinson told The Roadhouse people should not get confused into thinking the main beneficiaries from the introduction of the scheme would be the mining industry.

The beneficiaries would, he said, be those people who invest in the junior exploration sector.

“The EDI tax credit will be provided to Australian resident shareholders for greenfield exploration in Australia,” Bennison continued.

“It is proposed that there will be a ‘no taxable income’ test to ensure that the program is directed to junior minerals explorers to discover the ‘mines of tomorrow’ and provide future taxation streams for Governments.”

“We need to be encouraging additional long term investment in the mining sector to promote growth and productivity, and let the industry get on with business to ‘grow the pie’.

“This will provide considerable social and economic dividends, thousands of jobs and regional infrastructure throughout the Australian economy, including remote communities, and significant revenue streams for all levels of Government.

“This will be in addition to the heavy lifting that the industry has already done over the last six years by paying in excess of $100 billion in corporate tax and royalties.”