No increase to gold royalties: No Resource Rent Tax: Crook

Author: Tony Crook
Published on: 29-April-2010

The Nationals WA Candidate for the Federal seat of O’Connor Tony Crook will continue to support no increase to gold royalty following a forum held in Kalgoorlie this week (28 April 2010).

The forum discussion on Gold Royalties Models was convened by the Australasian Institute of Mining and Metallurgy (AusIMM) and raised the fact that the WA gold mining industry produces 34% less gold than what it did 10 years ago, but employs 30% more people.

Mr Crook said the cost of extracting gold has significantly increased and the resource replacement rate is not keeping up with extraction. He welcomed Premier Colin Barnett’s announcement that gold royalty rates will not be increased in this year’s State Budget.

Mr Crook said with many producers just getting back on their feet following the Global Financial Crisis and junior companies looking to get started, any increase in royalty rates would have a major impact on local businesses and communities.

“In fact, one could argue that decreasing the gold royalty would reduce the cut-off grade bringing into production marginal mines, stimulating exploration and actually producing more gold in the long term,” Mr Crook said.

“Mining companies make a massive contribution to both the State and National economies and every effort should be made to ensure they can continue to operate without an unreasonable impost from government.

“The WA Government currently receives significant royalties and thanks to the Nationals WA Royalties for Regions program, 25 per cent of this is distributed to the regions.”

Mr Crook said speculation is mounting about the impact the Federal Government’s Henry Tax Review may have on mining companies, in particular the predicted 40 per cent resource rent tax on mining and energy projects.

“This Resource Rent Tax or profit-sharing tax will go directly into the coffers of the Federal government and we all know too well their track record in returning proceeds back to WA,” Mr Crook said.

“Governments are already getting their ‘pound of flesh’ from the mining and exploration industries via income tax, mining applications, payroll tax, FESA levies, local government rates and more.

“It is ridiculous that we tax people and companies for employing people. We must continue to be vigilant to ensure that governments do not tax the mining industry out of existence. Increases to royalty rates and a rent tax could have significant implications for local businesses and local employment.”

“Western Australia is sick of being treated as a money pit to fund major projects in the East. WA is being Ripped Off with GST and we will be Ripped Off with this.”