The Productivity Commission’s recommendations arising from the inquiry into mineral and energy resource exploration are a strong endorsement of the imperative to cut the red and green tape holding back the minerals industry.

In its final report released today, the Productivity Commission draws attention to policy processes which fail to assess the benefits of exploration. Too often regulation has been used as a panacea to placate anti- mining sentiment rather than to protect important environmental or heritage values.

A clear example of this trend was the introduction of the ‘water trigger’ for coal seam gas and coal projects within the Environmental Protection and Biodiversity (EPBC) Act. The minerals industry warmly welcomes the Commission’s recommendation that the Australian Government gives priority to undertaking a review of its benefits and costs.

The ‘trigger’ has resulted in unnecessary referrals, duplicative processes, unnecessary costs and project delays for little or no environmental benefit. Removing the water trigger and the restriction on approvals bilaterals would be a positive step.

The industry also welcomes the Commission’s recommendation for a one-stop shop approach to managing heritage issues. There is considerable potential for reducing red tape and improving transparency without compromising heritage values to which the industry and the community are rightly committed.

The MCA emphatically endorses the calls for evidence-based land access decisions which are appropriate to the level of risk posed by exploration and take into account the benefits to the wider community.

The Commission finds that “poor regulatory practices, such as duplicated assessment processes and a lack of clear guidance on the criteria being used to assess exploration projects” have caused a “dramatic increase” in the length of time it takes to approve exploration and that delays pose “an unnecessary (and costly) impediment to exploration”.

The report’s findings and recommendations are timely given the results of the Fraser Institute’s 2013 Annual Survey of Mining Companies released just yesterday. The respected Canadian think-tank concluded that that the mining tax “remained a drag on confidence, while red tape and excessive regulation remain concerns”.

Western Australia was the only Australian jurisdiction to place in the top ten of the Institute’s influential Policy Perception Index which evaluates the policy factors that encourage or discourage exploration investment. Western Australia placed sixth in the ranking of 112 mining jurisdictions. South Australia was 11th and the Northern Territory 13th. Queensland was 24th (below Greenland); Tasmania 27th (below Botswana); Victoria was 33rd (below Chile) and New South Wales ranked 39th (below Namibia and Turkey).

The Australian Bureau of Statistics reported this week that exploration expenditure in Australia dropped 31 per cent in 2013. Of even greater concern, the total metres drilled fell 30 per cent in comparison with results achieved in 2012.

Clearly, Australia’s historical reliance on the strengths of political stability, geology and a skilled and educated workforce are no longer sufficient to secure the share of global exploration expenditure it used to enjoy. As the Productivity Commission has highlighted today, the potential for growth is great if Australia can remedy its policy settings. 

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