More taxes to hit NSW mining industry

The NSW Minerals Council (NSWMC) has welcomed the new state budget's commitment to regional infrastructure, but slammed its increase in mining taxes.

According to the NSWMC an additional $75 million in new taxes on the mining sector puts the industry at risk and undermines the State Government's attempts to support the industry through other measures.

Council head, Stephen Galilee, said the government appears unable to decide whether it is supporting or opposing the industry.

“We understand this is a tough budget and the mining industry is prepared to do our part. However the additional $75 million over four years to fund the New Frontiers program and other measures represents yet another cost for an industry already paying significant taxes and royalties and about to be slugged with the Mining Tax and the Carbon Tax,” Galilee said.   

The industry reportedly paid around $1.5 billion in royalties to the NSW government in 2010-11, with this figure expected to rise close to $1.9 billion in the coming financial year, which includes new supplementary coal royalties of $235 million in this new budget alone.

“Of course NSW risks losing significant mining royalties with the draft Strategic Regional Land Use Plan casting a dark cloud over future industry growth," Galilee said.

"Recent modelling undertaken by Monash University showed that under a medium impact scenario, NSW would forego almost $1 billion in mining royalties each year for the next 20 years if the draft land use plans proceed.

"With this additional tax pain the NSW mining industry wants to see some real gain through practical on-ground outcomes including more rapid project approvals and clearing of the backlog of around 50 stalled mine development proposals, many relating to modifications and extensions of existing mines."

However Galilee did welcome the commitment to increased infrastructure spending in mining regions, stating that it "was a good start".

"The $9.9 million from Resources for Regions to be invested in Muswellbrook hospital and in roads for Singleton is a good start in supporting the Upper Hunter as an attractive place to live and work.

"There is also $74 million in this budget set aside as part of the Hunter Infrastructure and Investment fund, including $15 million to improve roads in the Hunter.

"We also recognise that the proposed Lease of Port Kembla will deliver up to $100 million for infrastructure in the Illawarra.  The Maldon to Dombarton rail link would have a strong claim for funding under these arrangements," he said. 

Galilee called on the state government to reaffirm its commitment to mining and its responsible development in NSW.

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