Lobby group says NSW not a political football

RATHER than slapping a new tax on mining to offset the cost of the federal government’s proposed carbon tax, the New South Wales government should unblock the logjam of mining projects awaiting approvals, says the state’s mining lobby group.
Lobby group says NSW not a political football Lobby group says NSW not a political football Lobby group says NSW not a political football Lobby group says NSW not a political football Lobby group says NSW not a political football

Australian Coal Association chief executive officer Nikki Williams.

Staff Reporter

NSW Minerals Council chief executive Dr Nikki Williams warned there was only a narrow window of opportunity for NSW to attract major, long-term investment in the minerals sector that would bring jobs, economic growth and additional revenues to government.

“The bottleneck in the planning system is holding back the state, and the NSW government now has the key to unlock its potential,” she said in a statement.

“With 42 mining applications and modifications currently stuck in planning, the most obvious way for the government to make NSW a more attractive place to invest is through an efficient and effective planning system.”

Dr Williams welcomed the extension of the $A5.5 million New Frontiers exploration program for another year.

On the question of the royalty increase to recoup revenues lost from the impact of the carbon tax, while she welcomed the fact there was no rate and no date for the proposed rise, she cautioned there could be “some very damaging unintended consequences”

“The government’s commitment that there will be no net-loss for NSW miners is a good start,” she said.

“However, the assumption it will all be reimbursed by the federal government and is therefore a zero sum game for industry is a dangerous one.

“The MRRT, which hasn’t been finalised, is payable after profits are calculated.

“Royalties are based on production and paid before profits are made. There will be times when companies will not be liable for MRRT, but they will always be liable for royalties.

“The minerals industry and mining communities across NSW cannot become collateral damage from a state versus federal arm wrestle over revenue.”

The new tax on mining revealed in today’s NSW budget is the second rise since 2008 and follows a 154% hike in royalties over the past four years to $1.24 billion in 2010-11.

The royalty tax take alone from company profits in NSW has risen from 14% to 20% over the past three years, driving the effective tax rate to 44% from 40%.

“We understand the NSW government is in a difficult budget position as a result of the federal government’s proposed carbon tax, but the mining industry shouldn’t be a political football that’s tossed around between Sydney and Canberra simply because they can’t reach a sensible solution in the interests of NSW taxpayers,” Dr Williams said.

This article first appeared in International Longwall News' sister publication MiningNews.net.