West Australian premier Colin Barnett has been warned of the potential future risk to investment in the State if mining royalty taxes are not discussed.
The Chamber of Minerals and Energy of Western Australia (CME) insist that the premier have an open discussion with the State’s mining industry following his claims that the industry is under taxed.
CME chief executive Reg Howard-Smith said now is the time for the state government to have consultative talks with the sector to work through issues around royalties and government revenue.
“Suggestions that the sector is under taxed or has not paid its way are simply wrong,” Howard-Smith added.
The State recorded revenues from royalties of $3.2 billion from 2008 to 2009, which was an increase of close to $2 billion over the past five years.
Added to this was the State Government’s implementation of the $40 million mine safety levy.
“This government runs a real risk of increasing cost imposts on the resources sector to the point of damaging investment decisions.
“We are greatly concerned about an ad-hoc and cost burden approach on the resources sector, particularly in the absence of any consultation or impact assessment by government,” Howard-Smith said.
The CME urged the premier to only proceed on royalty rates after consultation with the mining industry, as acting without an open discussion may undermine investor confidence in the State.
“Raising royalties unilaterally without understanding the impacts on investment and operational costs could jeopardise some sectors viability and employment potential.”