Support for Victorian mining development welcome, but tax rises a concern

Victoria’s 2023 budget delivers support to help facilitate mining projects to promote regional development and embed Victoria into renewable energy supply chains.

The establishment of an Earth Resources Approvals Coordinator will provide strategic project facilitation to help complex mining projects navigate through the array of Acts, regulators and tiers of government and deliver much needed investments in regional Victoria.

MCA Victoria had called for this project facilitation role and welcomes the Government’s commitment to facilitate the pipeline of new critical minerals and important existing mines through complex approvals processes.

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.

However, the additional payroll tax is a tax increase on Victorian mines 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. 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.

Victorian mining is estimated to pay $140 million in royalties in 2022-23. This is 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.

Victoria is emerging as a major supplier of mineral sands and rare earths with a number of advanced projects in the pipeline which could double the number of mines in the state. Developing Victoria’s mineral sands and rare earth element deposits will embed Victoria into renewable energy supply chains.

Importantly, developing Victoria’s projects in mineral sands, copper and zinc, as well as exploration projects in gold, base metals, REE and lithium, will help reduce inequality in regional areas and provide a much need boost to regional Victoria.