Explorer

This month, the Federal Government delivered its first budget surplus in 15 years.

Given this result came off the  back of high commodities prices for Australia’s resources and the work of the resource’s industry, AMEC feels it was a missed opportunity for our industry.

The budget delivered no major support for the resources industry, critical minerals, or value-adding opportunities. While the previously announced $15 billion National Reconstruction Fund includes $1B for ‘value adding in resources’, we are yet to understand how this money will be allocated, and the same goes for the finalisation of the Government’s new critical minerals strategy. The inclusion of $57.1M for Critical Minerals International Partnerships to secure strategic and commercial partnerships looks promising, but it is a drop in the ocean when compared to the $US370B in tax breaks and grants through the United States Inflation Reduction Act 2022. Without strong support, the ability for Australian projects to attract capital for value-adding will diminish and with it, the opportunity to realise greater value from our resources and the highly skilled and highly paid jobs that would accompany it. However, more recent announcements by the Prime Minister and US President, regarding a critical minerals compact, suggest Australian companies may be able to tap into US incentives arising from the Inflation reduction Act. While there is yet to be any detail provided this certainly sounds very promising.

The government’s Migration Strategy goes some way toward addressing the current and future workforce issues with 70% of 190,000 migration places in 2023/24 to be made up of skilled migrants. This will assist our industry. However, delivering the housing growth to accommodate the needs of new migrants will be an enormous challenge.

In the week before the budget, the Minister for Infrastructure announced an expected 90-day review into the $120 billion, ten-year infrastructure pipeline of over 700 projects. Continued infrastructure investment in the regions is key to stimulating economic development and critical to improving the commercial viability of mining and mineral exploration projects in these areas. We will be watching the outcome of the infrastructure review closely.

The decision to alter the Petroleum Resource Rent Tax to levy greater revenue from these projects has also raised concern, as do a range of foreshadowed regulatory measures that are likely to threaten greater investment in mining and mineral exploration. These include the massive increase in Queensland coal royalties, greater uncertainty around tax increases for petroleum and mining sectors at a Commonwealth level, and increasing levels of environment and heritage regulation across the board.

All eyes are on WA as the State introduces its Aboriginal Cultural Heritage Act on 1 July, and the industry begins to engage through a comprehensive new framework. There is no doubt this will be a difficult transition for industry. The new system will be more challenging to navigate and there will be a considerable adjustment period for all involved in these new processes. With further cultural heritage legislation foreshadowed at a Federal level, these challenges could soon be shared across the country.

Despite, some challenging headwinds, AMEC will continue to take up member issues and work toward outcomes that are beneficial for industry. You can read more about our efforts in the various sections of Explorer.

And, as always, the AMEC team are on hand to support our members, so don’t hesitate to make contact if you need a helping hand.

WARREN PEARCE

Chief Executive Officer