Budget Response - Stimulating the engine room to drive growth
The South Australian Chamber of Mines & Energy (SACOME) welcomes the 2016 Federal Budget as a positive contribution to stimulate exploration, the engine room of growth for the resources sector, and encourage investment into the sector and its associated service businesses.
Jason Kuchel, Chief Executive SACOME, says “the budget contains three key measures set to benefit South Australia’s resources industry. We call on the Federal Government to consider the next steps required to further develop this important sector for South Australia and Australia’s economy.”
“SACOME also calls on the Federal Labor party to provide bi-partisan support to such an approach if it also wishes to attract further investment dollars to Australia to help grow our economy.” Mr Kuchel said.
1. GROWING THE ENGINE ROOM THAT DRIVES GROWTH IN THE MINING SECTOR
The South Australian Chamber of Mines & Energy welcomes the announcement of the $100 million initiative in the 2016 Federal Budget to explore for future mineral, petroleum and water resources over the next four years. The new funding to Geoscience Australia will build on the recognised success South Australia has had though precompetitive data under PACE.
Discoveries such as Olympic Dam and Carrapateena were made from the availability of precompetitive data and assistance in mineral drilling. The Exploring for the Future program will achieve similar results, providing precompetitive data over the next four years for South Australia, Western Australia, Northern Territory and Queensland.
Mr Kuchel said “It is well known that providing precompetitive data to explorers enables them to discover the mines of the future, and according to some estimates there can be a multiplier of 20 for every dollar spent on precompetitive data.”
“This has been our experience here with the South Australian Government’s Plan for Accelerating Exploration also known as PACE”.
SACOME lobbied the Federal Government to include South Australia in its northern Australia development plans as the need to provide funding for undeveloped regions also exists in the far north of South Australia.
“South Australia has just as great mineral and petroleum potential as northern Australia if not more” said Mr Kuchel.
“Furthermore, the identification of water resources has the potential to benefit agriculture and tourism in addition to mining. Water resources not suitable for stock and domestic use because of high salinity or other impurities can still be used for minerals processing.”
SACOME noted that the Exploration Development Incentive, a key policy to encourage Greenfields exploration particularly in South Australia, did not receive funding allocation post 2016-17.
“SACOME was at the forefront of this policy’s creation” said Mr Kuchel. “We can only assume that as the review of this policy has not yet occurred, the funding allocation has not been made. SACOME will continue to lobby for this pilot to be continued and amended appropriately to ensure its future value is realised, helping to raise the much needed private capital to fund Greenfields exploration, which is the engine room of the mining industry.
“Without discoveries, mining companies do not have new mines to develop.”
2. COMPANY TAX RATE REDUCTION TO HELP ATTRACT INVESTMENT DOLLARS
SACOME supports the announcement to lower the company tax rate for small businesses as it encourages them to invest in developing their business. Many companies support the minerals and energy industries with world class services and the immediate lower tax rate of 27.5% up to a threshold of $10 million will encourage further investment by these companies, leading to jobs and growth. The access to additional taxation benefits for companies with a turnover of $10m up from $2m is also a welcome stimulus.
Jason Kuchel said “The signalled intent to progressively introduce a lower company tax rate is welcome at a time where positive signals like this are needed to attract highly mobile investment dollars from around the globe to develop our mining and energy projects. The long lead times required to develop projects will potentially fit well with this proposal.”
3. REGIONAL ROADS
The announcement of further funding for the APY lands road upgrades is welcomed. Opening access to this region will assist local communities and further the mineral potential for this underexplored region. This region comprises one of the key frontiers under the South Australian Government copper strategy and enabling greater access will assist exploration.
Mr Kuchel added “A failure to include the sealing of the Strzelecki Track however is seen as a missed opportunity - not only for the oil & gas sector but also for livestock, tourism and freight between South Australia and Queensland.”
The South Australian Chamber of Mines & Energy (SACOME) welcomes the 2016 Federal Budget as a positive contribution to stimulate exploration, the engine room of growth for the resources sector, and encourage investment into the sector and its associated service businesses.
Jason Kuchel, Chief Executive SACOME, says “the budget contains three key measures set to benefit South Australia’s resources industry. We call on the Federal Government to consider the next steps required to further develop this important sector for South Australia and Australia’s economy.”
“SACOME also calls on the Federal Labor party to provide bi-partisan support to such an approach if it also wishes to attract further investment dollars to Australia to help grow our economy.” Mr Kuchel said.
1. GROWING THE ENGINE ROOM THAT DRIVES GROWTH IN THE MINING SECTOR
The South Australian Chamber of Mines & Energy welcomes the announcement of the $100 million initiative in the 2016 Federal Budget to explore for future mineral, petroleum and water resources over the next four years. The new funding to Geoscience Australia will build on the recognised success South Australia has had though precompetitive data under PACE.
Discoveries such as Olympic Dam and Carrapateena were made from the availability of precompetitive data and assistance in mineral drilling. The Exploring for the Future program will achieve similar results, providing precompetitive data over the next four years for South Australia, Western Australia, Northern Territory and Queensland.
Mr Kuchel said “It is well known that providing precompetitive data to explorers enables them to discover the mines of the future, and according to some estimates there can be a multiplier of 20 for every dollar spent on precompetitive data.”
“This has been our experience here with the South Australian Government’s Plan for Accelerating Exploration also known as PACE”.
SACOME lobbied the Federal Government to include South Australia in its northern Australia development plans as the need to provide funding for undeveloped regions also exists in the far north of South Australia.
“South Australia has just as great mineral and petroleum potential as northern Australia if not more” said Mr Kuchel.
“Furthermore, the identification of water resources has the potential to benefit agriculture and tourism in addition to mining. Water resources not suitable for stock and domestic use because of high salinity or other impurities can still be used for minerals processing.”
SACOME noted that the Exploration Development Incentive, a key policy to encourage Greenfields exploration particularly in South Australia, did not receive funding allocation post 2016-17.
“SACOME was at the forefront of this policy’s creation” said Mr Kuchel. “We can only assume that as the review of this policy has not yet occurred, the funding allocation has not been made. SACOME will continue to lobby for this pilot to be continued and amended appropriately to ensure its future value is realised, helping to raise the much needed private capital to fund Greenfields exploration, which is the engine room of the mining industry.
“Without discoveries, mining companies do not have new mines to develop.”
2. COMPANY TAX RATE REDUCTION TO HELP ATTRACT INVESTMENT DOLLARS
SACOME supports the announcement to lower the company tax rate for small businesses as it encourages them to invest in developing their business. Many companies support the minerals and energy industries with world class services and the immediate lower tax rate of 27.5% up to a threshold of $10 million will encourage further investment by these companies, leading to jobs and growth. The access to additional taxation benefits for companies with a turnover of $10m up from $2m is also a welcome stimulus.
Jason Kuchel said “The signalled intent to progressively introduce a lower company tax rate is welcome at a time where positive signals like this are needed to attract highly mobile investment dollars from around the globe to develop our mining and energy projects. The long lead times required to develop projects will potentially fit well with this proposal.”
3. REGIONAL ROADS
The announcement of further funding for the APY lands road upgrades is welcomed. Opening access to this region will assist local communities and further the mineral potential for this underexplored region. This region comprises one of the key frontiers under the South Australian Government copper strategy and enabling greater access will assist exploration.
Mr Kuchel added “A failure to include the sealing of the Strzelecki Track however is seen as a missed opportunity - not only for the oil & gas sector but also for livestock, tourism and freight between South Australia and Queensland.”