The Victorian Government delivered the 2019-20 State Budget today, detailing plans to remove the exemption for gold from royalties on 1 January 2020.
The government also advised that the royalty rate will be set at 2.75 per cent of the net market value of gold production – consistent with the general royalty rate for minerals. Only small miners will be exempt from the updated royalty.
The Minerals Council of Australia (MCA) was quick to state that the Victorian Government’s ‘gold tax’ threatens hundreds of jobs in regional Victoria and would undermine confidence just when new opportunities are emerging to support regional communities with increased mining investment.
Mining employs nearly 12,000 Victorians and supports an additional 88,000 jobs through a large supply chain of small and medium-sized businesses in the mining equipment, technology and services (METS) sector.
Minerals and METS supports around four per cent of Victoria’s Gross State Product with a combined economic contribution to the Victorian economy of at least $13.6 billion.
Apart from Tasmania, Victoria is already behind every other Australian state in terms of mining competitiveness, with the Fraser Institute’s Annual Survey of Mining Companies ranking the state 43rd out of 83 jurisdictions globally in its Investment Attractiveness Index.
Executive Director for MCA Victoria, James Sorahan, said that the government has not consulted or listened to regional communities that rely on highly paid, high skilled jobs that mining delivers in Victoria.
“Despite its own Resources Strategy stating that ‘Mining operations are the backbone of many regional towns, providing employment, opportunity and a sense of community’, the government has not consulted industry or local communities before announcing this new tax on regional jobs,” Mr Sorahan said.
“It would also drive away investment at the very time when Victoria needs the ongoing long-term prosperity created by mining in gold operations in Fosterville, Ballarat and Stawell.”
Mr Sorahan further commented that the claim that Victoria should impose a gold royalty because other states do ignores the unique characteristics of gold mining in Victoria.
“Royalty regimes are designed differently in each state to encourage development of a state’s mineral resource for the benefit of the community, including different royalty rates, depreciation arrangements, exemptions and other features.”
Mr Sorahan concluded by stating that if the Victorian Government does not immediately abandon this ‘tax cash grab’, its claimed commitment to regional development and communities will be a ‘hollow boast’.
