20/04/2004 - 22:00

Miners in need of a break

20/04/2004 - 22:00


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RESEARCH and development are the lifeblood of a business’s future.

RESEARCH and development are the lifeblood of a business’s future.

No matter how successful a company is, there is always someone, somewhere, looking to do it better and take some market share.

In WA, our biggest industry is resources and a big part of its R&D, arguably, is exploration.

It’s no secret that exploration has hit the doldrums during the past few years, but the real cause for concern is that the recent wave of stock market floats may not do much to fix this situation.

The survey figures in this week’s special report, based on figures supplied by Intierra, seem to show that last year’s exploration spending was little better than the previous year.

More positively, December was strong, but so was the previous corresponding period.

While we need to wait and see what March will show, the evidence is that not enough of the new raisings are being directed at WA exploration, with close to half the new funds earmarked for offshore locations.

Kalgoorlie might be booming again, but the region needs a prolonged period of high spending to start providing our miners with enough proven reserves to keep them all in business for a long time yet.

This is old ground, so to speak, but it does provide ammunition for the industry to revisit the tax argument it has had with the Federal Government for some time.

Tax incentives are an issue when it comes to the big picture, because economists think they distort things by drawing investment away from other sectors. This is inefficient, and can be unfair.

Tax incentives have certainly created aberrations in the wine industry, for instance. Just see this week’s story on Xanadu.

However, the minerals industry might have a point. It is not seeking a tax break to compete with other Australian industry. It wants to keep capital raised for exploration in the State where explorers have to battle a significant level of uncertainty, such as Native Title issues.

Whatever the case, it is vital we keep funds flowing into exploration in WA.

Without this ‘R&D’ expenditure we face a threat to our successful mining industry and all the wealth it brings to underpin this wonderful lifestyle we all live.

Deregulation view restricted

THE irony of our biggest industry demanding a tax break while WA’s small retailers are protected from national competition should not be lost on anyone.

Tax breaks are, after all, a form of protection from competition, even if the strategic thinking is sound.

Our page three story this week focuses on the possibility of yet another lobby group to wage war over our retail scene.

While the membership of this mysterious third force remains unknown, it is worth wondering why so much time and effort is being devoted to battle.

Obviously it’s money, or more precisely consumer spending, which it appears can be directed somewhat by government-legislated trading hours.

As I have said before, I have some sympathy for the independents’ cause, although I believe deregulation is inevitable and the best WA’s retailers can do is establish a sensible time frame, which includes the removal of some hurdles to their survival, such as IR laws.

But they need to be realistic.

Few business people I speak to, and they are all consumers, think restricted trading is right.

I certainly can’t see why retailers deserve protection when an industry like mining can’t get it.

Without the money mining earns this State, there would not be any consumers to keep those retailers, big or small, in business.

Top lawyers

A SHORT reminder about our Legal Elite, entries for which are now open.

We’re looking for the best of the best among our legal community, and there’s a case of wine up for grabs for one lucky lawyer who sends in their nomination form.





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