The industry has commented on yesterday’s Liberal Party block of the Western Australian Labor Government’s planned gold royalty hike.
Yesterday morning, as Liberal MPs voted to disallow Western Australia’s Labor Government to pass a 50 per cent royalty hike on the gold sector, industry support was unanimous in its approval after what had been several weeks of contention.
Upwards of 700 protesters gathered at the steps of the State Parliament in protest of Labor’s plans while the decisions took place.
WA Leader of the Opposition Mike Nahan called the decision “tough” but opined that the McGowan Government could not progress with its plans as it “did not seek or have a mandate to increase the gold rate”.
“The public needs to be very clear; this royalty increase is not about budget repair, it is about paying for Labor’s $5 billion in unfunded and unaffordable election promises,” he said.
The Liberal Party’s disagreement over the block is largely in keeping with other parties’ beliefs, such as the Shooters, Fishers and Farmers, the National Party, One Nation and the Liberal Democrats, all of whom, in a rare example of political solidarity, have expressed disapproval over Labor’s plans.
The introduction of the gold royalty hike was expected to bring an extra $400 million to state coffers, a controversial decision given the potential for the revenue’s appropriation into other regions through GST, as well as the detrimental effect on local mining jobs, a major contributor to the WA economy.
Industry bodies have expressed approval at the decision not to proceed. Association of Mining and Exploration Companies (AMEC) chief executive officer Graham Short said “economic and common sense has prevailed”.
“The proposed gold royalty increase by the WA Government is a broken promise that was announced in the Budget without any prior industry consultation, or understanding of the industry. It has also already significantly increased the state’s sovereign risk, and damaged WA’s reputation as a safe place in which to invest,” he said.
Saracen Minerals managing director Raleigh Finlayson agreed, stating: “Everyone in the gold industry is extremely grateful to all the MPs who have vowed to block Labor’s tax increase [and] we are also very appreciative of the support we have received from suppliers, contractors and so many people in the wider WA community who recognise the vital role the gold industry plays in creating jobs and economic growth.”
Northern Star chairman Bill Beament likewise expressed approval of the move, stating that WA Labor leader Mark McGowan had flip-flopped on the issue since he came into power.
“Mr McGowan promised not to increase the gold tax if he was elected,” he explained. “He was right to make that promise and he is wrong now to break it.”
Western Australia currently employs around 25,000 people in the gold sector, which was valued at $10 billion in fiscal 2015-16. It is the state’s second most valuable mineral sector after iron ore.