Hansard debates

Mrs McARTHUR (Western Victoria) (14:53): I rise to support the call that this house disallow regulation 5 of the Mineral Resources (Sustainable Development) (Mineral Industries) Regulations 2019, as proposed by Mr Davis and moved by my colleague Mr Rich-Phillips. Clearly our friend Mr Melhem when he was over on that side of the chamber showed he has no idea how high-risk business and investment works.

The other side are addicted to tax and addicted to wealth redistribution, but most on the other side, having never been in the business of creating wealth and taking risks—and mining is a high-risk business and requires massive investment—have no idea what the implications of such a tax are to the small mining companies in this state. Their normal approach is to tax and spend, and when they run out of money they will find another loophole to try and tax the hardworking members of this state.

Like Mr Quilty, I have previously spoken against this tax. It is an inside-the-tram-tracks tax. Outside the West Gate we work hard to provide food and wealth that frequently benefits those in the city. Goldmining is an important employer in western region Victoria. The mine in Ballarat employs 160 people directly and dozens of contractors. The Stawell mine, which reopened last year, has around 190 direct employees and dozens of contractors. These are well-paid regional jobs, and they rely on a viable gold industry. This royalty threatens that. The general manager of Castlemaine Goldfields in Ballarat has called it ‘a very real and present threat to our viability’.

It is important to understand that neither Ballarat nor Stawell are like Fosterville or some of the other large operations which exist across Australia. They cannot simply sit back and watch the money roll in but face a constant need to explore, adapt and invest to maintain their viability. This government clearly does not appreciate that. They see a goldmine and think it is a cash cow.

Some mines, however, are close to the margins of viability, and it is the future of these operations and their employees that the Labor government has threatened. The Stawell mine closed in 2016, with huge consequences for employees and that small local community. Production only resumed last year, while the Ballarat mine reopened in 2011. The government’s one-size-fits-all treatment of the goldmining industry threatens well-paid jobs in regional communities with limited employment opportunities. The tighter the margins, the larger the risk. Even should the market price of gold remain high enough to keep these mines in business in the short term, the nature of their business requires constant investment in exploration to sustain operations. This consideration is completely ignored by the royalty imposed by this government. Everyone will be hit, big or small, profitable or loss-making. As Troy Cole, general manager of Stawell Gold Mines, said:

Those places that are not at that stage should have a different approach applied that encourages investment and encourages the start-up of the industry.

When you have very rich ore bodies generating a lot of wealth, that would be a little bit different, but when you’re in a marginal environment and the business is in start-up and you’ve got heavy capital investment going in, you need special considerations.

It is perhaps unsurprising that we have ended up with this ill-thought-out tax, so blunt an instrument, when we consider the deeply inadequate consultation which preceded its announcement. This really was an ambush of industry, a measure introduced to raise money in a hurry, with no understanding of the damage it will cause to the industry and the threat to its long-term prospects.

It is clear to me that we must vote to disallow this royalty. Should it be considered in the future, it must be done in consultation with industry so that this mistake is not repeated. It is perfectly possible to design a regime which would encourage sustained business through a whole or partial offset against ongoing exploration costs and capital investment in infrastructure. All of these considerations have been ignored by the government in the royalty imposed by these regulations, which fail to understand the variety of the industry and fail to understand our regional economy. They represent a short-term cash grab with damaging long-term consequences for regional Victoria.

I urge members on the other side and the crossbench to please think of the jobs and workers in regional Victoria. We need these jobs desperately and we need to keep these businesses viable. They do not need to be taxed.