Craigie calls on Rudd to honour Flow-Through Shares Scheme promise

Author: Lynne Craigie
Published on: 31-May-2010

The Nationals Federal candidate for Durack, Lynne Craigie, has urged the Federal Government to honour its commitment to introduce a Flow-Through Shares Scheme (FTS) to promote investment and exploration in Australia’s resources industry.

Ms Craigie, and State Member for Mining & Pastoral Region, Hon Wendy Duncan, said Mr Rudd’s commitment to introduce a flow-through share scheme for minerals and energy resource exploration had been forgotten.

“The notion of a Flow-Through Shares Scheme is nothing new and it is above political points scoring as to who introduces it. The FTS, working alongside the already existing Exploration Incentive Scheme should be a priority and creates regional development and employment,” said Ms Craigie.

Promoting investment in the resources industry is especially important in the wake of the global financial crisis, where excessive debt levels and reduced access to capital has seen a number of resources projects cancelled.

“At some point the Rudd Government is going to have to pay for their incentive spending and it will once again be down to the mining, resource and agricultural sector, that is, regional Australian’s, to pay for this,” said Ms Craigie.

Flow-through shares help to stimulate resource exploration by enabling the transfer of deductions from individual companies to individual investors, who can then use it to offset their own tax liabilities.

This helps to make junior exploration companies more attractive investment prospects and rectifies the current tax anomaly that advantages big companies generating higher income.

“The resources industry plays a very significant role in the Australian economy, yet has missed out on the stimulus measures other industries benefited from following the global financial crisis,” Ms Duncan said.

“In Western Australia The Nationals have introduced the Exploration Incentives Scheme (EIS) to support new minerals and energy discoveries and promote the long-term sustainability of the State’s resources sector.

“The EIS is delivering real results for WA’s economy and potentially creating employment opportunities. The Federal Government should take a leaf out of our book and introduce measures, such as flow-through shares, to support the resources industry and jobs in regional Australia.”

The $80 million EIS is a key part of Royalties for Regions designed to increase private sector resource exploration through a range of programs, including funding to support innovative drilling in greenfield areas.

For further comment contact Lynne Craigie on 0439 999 358