$100m exploration tax credit delayed again; but industry remains optimistic
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It is looking less likely that the Australian government’s proposed new exploration tax credit will get through the Senate before parliament winds up this week.
The new Junior Mineral Exploration Tax Credit passed through the House of Representatives in two days, but the Senate has pushed it back down the agenda.
The initiative would allow explorers with no mining income to renounce and pass on future tax deductions to Australian resident investors.
The good news is explorers shouldn’t have to wait too much longer.
“I think it is just placing with competing priorities in terms of parliamentary time,” Association of Mining and Exploration Companies chief Warren Pearce told Stockhead.
So if the bill doesn’t get passed this week, the Senate will look at again when it resumes on March 19 — and the industry is confident it will get through.
“I’m not expecting it will be a much greater delay than that,” Mr Pearce said.
“We are definitely confident, particularly because we’ve had strong indications from both major parties, the Coalition government and the Labor Party, that they will support the bill.”
The first year of the $100 million four-year commitment was supposed to be the 2018 financial year, of which there is only a few months left.
The Tax Credit is a modified version of the previously failed Exploration Development Incentive, which the government binned in May last year following a review that showed a 36 per cent drop in registered participants from the first year to the second year.
But the move angered junior explorers and the government agreed to work with industry to find a better alternative.
“It was disappointing it couldn’t make it into parliament last year,” Mr Pearce said. “That would have really given a lot more time for companies to be able to take advantage of the first year the bill was expected to cover and still is expected to cover.
“You’re alerting people to the possibility of something that’s already nine months through the financial year. But even so just actually seeing this thing progress and become a reality is incredibly satisfying and it’s good news for our industry.”
The JMETC, which is much closer to the more successful Canadian flow-through share scheme, is expected to provide greater certainty around investment in the resource sector and hopefully translate into an uptick in much-needed capital for exploration projects.