Federal intransigence frustrates industry

AUSTRALIAN minerals exploration has been in free-fall from $1,148 million in 1997 to $640 million last year. But despite the figures, the Federal Government has refused to introduce investor tax incentives, according to the Association of Minerals and Exploration Companies.

Companies looking to advance existing holdings or commence new exploration are finding it difficult to raise sufficient funding, AMEC chief executive officer George Savell said, echoing concerns raised by Western Mining Corporation last week in Adelaide and again at this week’s Diggers & Dealers Forum in Kalgoorlie.

Mr Savell said AMEC had presented its investor tax flow-through scheme to the Australian Tax Office, the federal treasury and “every politician” during the past two years.

“But we’ve made absolutely no progress,” he said. “They’ve given no cogent reasons. It’s been quite uncanny.”

Although based on a successful Canadian model, whereby Canada’s minerals exploration grew to equal half the world’s exploration investment in 1997, the standard Australian Government response had been akin to little more than: “We’ve studied it and don’t like the idea much,” Mr Savell said.

“They’ve failed to work out that if you put something like this in place, you’ll gather all the money in from Asia and you’ll have another leg to your finance industry,” he said.

Unequivocal about the response to AMEC’s overtures, Mr Savell added he believed the Federal Government was acting against the interests of minerals exploration in not issuing product rulings for managed investment schemes for minerals exploration.

Mr Savell said various minerals industry advocates were all having the same amount of success, “which is about none”.

“They hand out, like the proverbial slush fund, product rulings for vineyards, plantations and olive groves,” Mr Savell said. “It’s quite silly, because Australia lives off the mining industry. They haven’t appreciated the sort of situation they’re facing.

“In the future we could run into the wall, because there won’t be any new mines to replace the old mines.

“But if the government changes there’s a good chance they’ll address the idea seriously. We’ve spoken to five senior people in the Federal Opposition and every one of them thought it was a good idea.

“Although now we’re now waiting to see whether they put it in their policy or not. This is the question.”

A spokesperson for WA’s Minister for State Development, Clive Brown, said that WA had experienced less of a downturn compared with the worldwide reduction in minerals exploration.

A Native Title task force and review committee is looking at Native Title negotiation processes and procedures, while the taskforce is examining application processes for mining and exploration leases under Native Title.

Funding for the Geological Survey Division of the Department of Mineral and Petroleum Resources has been allocated to exceed forward budget estimates by $20 million over four years.

“The WA Government is very much aware of industry’s needs and is working to support these,” the spokesperson said.

Industry, Science and Resources Minister, Nick Minchin’s office said the Government had not been idle, allocating $63 million in the Budget to the Australian Geological Survey and $38.2 million to two Cooperative Research Centres, which focused on minerals exploration.

Tax reform had delivered major benefits to the resources sector.

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