Western Australia is slugging its miners an extra $65m. WTH?
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West Australian miners are already doing the heavy lifting when it comes to repairing their State’s budget — and now the government wants to hit them up for even more.
The mining industry already contributes around $5 billion — or 17 per cent of total revenue.
The government has now announced about $65 million of increased fees, charges and levies across the broader mining industry.
First up there is a 6 per cent increase in 2018-19 and a further 6 per cent increase in 2019-20 in the fees paid for mining tenements.
“Funding of $10 million per annum for the Exploration Incentive Scheme will be raised through increases to annual mining tenement rents,” Treasurer Ben Wyatt said.
“This is not only a responsible decision financially, it will also support and create local jobs through the encouragement of exploration investment and lock in ongoing funding for the scheme.”
Exploration licence fees, meanwhile, will increase by 1.5 per cent.
While miners were relieved there were no proposed hikes to royalties, there was disappointment at the decision to raise mining tenement fees to fund the Exploration Incentive Scheme.
The scheme offers a refund of up to 50 per cent of direct drilling costs through a competitive application process.
The WA government announced last August that it would extend the program and commit a further $10 million a year for the next two years.
“It is disappointing that the highly successful Exploration Incentive Scheme will now become fully cost recovered through increases to the mining tenement rentals,” said Warren Pearce, chief of the Association of Mining and Exploration Companies.
A government funded-study into the effectiveness of the scheme found that every $1 million invested stimulated exploration activity and generated $10.3 million in benefits for WA.
The WA Budget also included a proposal to remove the exemption for the mining industry from the Building and Construction Industry Training Fund (BCIF).
This was expected to generate a further $25 million over four years.
There will also be a 5 per cent increase in the mine safety levy, on top of last year’s 33 per cent hike.
“There can be no doubt the industry is paying its fair share and contributing to budget repair in WA,” Mr Pearce told Stockhead.
“We’ll re-engage with the government around the Exploration Incentive Scheme and we will look to work with government on the formulation of the proposal around the BCIF.
“We’ll obviously engage to ensure that model is fair to industry.”
WA needs to do a bit of work to improve its attractiveness to explorers after the state slumped to 5th place on the Fraser Institute’s Investment Attractiveness Index.
The State, which is the largest mining jurisdiction in Australia, fell from 3rd in 2016 and top spot in 2015.