The 2023-24 Victoria State Budget has been released, including $23.2 million in investments for resources initiatives, and tax increases for Victorian mines.
Key takeaways for the mining and resources sector include:
- $23.3 million in new funding for the Victorian resources industry to uplift regulator capability and approvals processes
- Establishment of an Earth Resources Approvals Coordinator, to provide strategic project facilitation, help complex mining projects navigate through the array of acts, regulators and tiers of government, and deliver much needed investments in regional Victoria
- Funding for amendments to the Mineral Resources (Sustainable Development) Act 1990
- An additional payroll tax increase on Victorian mines
Industry Response
The Minerals Council of Australia (MCA) has welcomed the Victoria Government’s 2023-24 Budget, saying it delivers support to help facilitate mining projects to promote regional development and embed Victoria into renewable energy supply chains.
MCA Victoria had previously called for a project facilitation role, such as an Earth Resources Approvals Coordinator, and welcomed the Victorian Government’s commitment to facilitate the pipeline of new critical minerals and important existing mines through complex approvals processes.
James Sorahan, Executive Director, MCA Victoria, said, “Funding in the Budget for amendments to the Mineral Resources (Sustainable Development) Act 1990 is timely as the state seeks to modernise its mining legislation to focus on outcomes and risk-based regulation.”
“Taken together, the $23.2 million in resources initiatives are a positive example of government working with industry to get critical minerals projects underway,” Mr Sorahan said.
“However, the additional payroll tax is a tax increase on Victorian mines which comes at a bad time for increasing confidence for new investment in Australian mining. This tax increase will be an additional burden on the very businesses that kept the Australian economy from a prolonged recession as the nation battled COVID.”
The most recent Fraser Institute report ranked Victoria very poorly on approval timeframes and Mr Sorahan said more work needs to be done to deliver timely permitting approvals and to support industry investment.
“Clearer and more certain project approval timeframes, and reform to Victoria’s flawed gold royalty, is required if Victoria is to attract mining investment,” Mr Sorahan said.
“Victorian mining is estimated to pay $140 million in royalties in 2022-23, in addition to various fees and charges imposed by mining.
“Victoria needs a broader economic base and a more diverse economy. Development of the pipeline of critical minerals projects would mean more mines, more jobs and generate royalties to fund state services and enable sustained budget repair.”
Association of Mining and Exploration Company (AMEC) Chief Executive Officer, Warren Pearce, said the budget includes new initiatives to support regulation for the minerals industry – but more needs to be delivered to support critical minerals in Victoria.
“Royalty income is forecast at $574 million through to 2026-27, reflecting a strengthening minerals industry,” Mr Pearce said.
“The budget has allocated $23.3 million in new funding for the Victorian resources industry to uplift regulator capability and approvals processes along with delivering its planned regulatory reform. The allocated budget funds will be directed toward establishing a coordinating body – drawing precedent from a similar initiative used successfully for the extractives industry – to facilitate project approvals and streamline the regulatory landscape across departmental jurisdictions, reducing overlap and improving timeframes and outcomes.
“AMEC has long advocated for a more efficient approvals process in Victoria, alongside critical legislative reform, and is looking forward to working with government to deliver these important initiatives.”
The 2022 budget included an investment of $7.4 million over three years to support the development of a critical minerals prospectus and grants program, although Mr Pearce said that one year on and a prospectus or a grants program has still not been announced.
“It’s time Victoria put pen to paper and developed a Critical Minerals Strategy for the state as other leading jurisdictions have done. A clear path forward would support both industry and Federal Government investment in this new frontier for the mining industry,” Mr Pearce said.
“While Australia has remained the most attractive region in the world for mining investment, Victoria has continued to rank among the lowest Australian jurisdictions for the three key parameters of investment attraction, policy perception and best practices mineral potential in the internationally respected annual Fraser Institute Survey.
“Industry needs clear government support to continue exploration success, the identification of new mineral deposits and the ability to progress discoveries into productive operating mines that will lead to growth, jobs and investment.
“Victoria must compete as an exploration and mining destination of choice and needs to work harder to secure the future of the industry and its important role in underpinning the Government’s key emissions objectives,” Mr Pearce said.
