Media Releases


MCA – VICTORIA WELCOMES 2013 VICTORIAN STATE BUDGET

The MCA Victorian Division congratulates the Coalition Government on the 2013-14 Budget handed down today. The strong renewed focus on mineral development is warmly welcomed. Victoria has a proud mining history spanning 160 years and the sector can play a critical part of Victoria’s future economic growth and regional economic development. Victoria has world class resources and the Budget acknowledges this with a $19.1 million (over the forward estimates) initiative to attract new exploration, reduce barriers to investment and promote Victoria as an investment destination. A targeted pre-competitive geoscience program, with co-funded exploration initiatives, effective and efficient regulatory and policy are crucial to attracting the investment needed to develop the State’s resources. This coupled with the impending release of the Government’s response to the Parliamentary Inquiry into Greenfields Exploration and Mineral Development in Victoria will hopefully bolster Victoria as an attractive investment destination for mineral exploration and development. The incorporation of Energy and Resources into the Department of State Development, Business and Innovation (DSDBI) through the recent machinery of Government changes also better aligns the settings governing the minerals industry with expertise in business development, investment and trade. The continuation of Clean Coal Victoria ($8.3 M over the forward estimates) is also applauded – this initiative remains key to the future development of Victoria’s coal fields. Risk management underpins mineral operations and the funding ($4.2M) for building capacity within DSDBI and undertaking technical research in understanding mine stability risks is essential. Further Regulator intervention in management’s ability to manage risk will however not be supported. The minerals industry looks forward to working with the Government to deliver on our shared objective for a strong, safe and sustainable mining industry.

GOVERNMENT SHOULD NOT PROCEED WITH NEW TAXES ON MINING

Plans to impose two new taxes on the resources sector as reported today will be vigorously opposed by the Minerals Council of Australia. If the Government proceeds with plans for two new taxes on foreign investment and exploration, it will have introduced four new taxes on mining since 2007. It needs to get a new trick.

The Government should be focussing on boosting economic growth through policies that cut costs, improve productivity and reduce sovereign risk. Instead they are headed in the opposite direction.

The proposals leaked to the media today demonstrate that our policy makers are refusing to do the hard yards of reform and are instead falling back on the lazy and counterproductive option of increasing business taxes to fund everincreasing spending.

The minerals industry already pays more than $20 billion in taxes and royalties a year net of the carbon tax and the Minerals Resource Rent Tax.

The industry’s effective tax rate – the ratio of taxes and royalties paid as a proportion of net revenues – has remained high and relatively stable, averaging 41.6 per cent since 2001-02. Even net of state royalties, the average effective company tax rate for mining is above the average for all industries.

The Government should be spending that significant revenue better, not continually asking for more.

Altering the thin capitalisation and exploration deduction provisions are a naked tax grab. They are not concessions or loopholes. They are critical features of the business tax system.

The Business Tax Working Group examined both of the proposals floated today and shelved them. They did not recommend changing either of the measures flagged today.

Exploration is the nursery of Australia’s mining industry. Adding a new impost at a time when Australia’s share of global exploration spending is falling and costs in general are escalating dramatically is the wrong way to go.

Confidence to invest is critical if Australia’s economy is to continue to grow. New business taxes are precisely the wrong signal to be sending to foreign investors.

Senate Economics References Committee – Inquiry into Minerals Resource Rent Tax

Thank you for the invitation to the Minerals Council of Australia to make a submission to, and appear before this inquiry into the development and operation of the Minerals Resource Rent Tax. The MCA’s representation here includes three of our member companies – BHP Billiton, Rio Tinto and Xstrata, who are not only integral to the formation of the MCA policy, but all have made their own submissions to this inquiry.

THE MINING EQUIPMENT, TECHNOLOGY AND SERVICES SECTOR: AUSTRALIA’S QUIET ACHIEVER

Australia’s resources boom has sparked a quiet revolution in Mining Equipment, Technology and Services with the METS sector now valued at more than $71 billion a new paper shows. A public policy monograph by Don Scott-Kemmis, an innovation management and policy consultant and Adjunct Professor at the University of Technology Sydney, shows that the rise of Australia’s METS sector has been an untold success story from the wider mining boom.

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