The Government has secured passage through the Senate of reforms that provide incentives for mineral exploration and remove punitive tax rates on excess superannuation contributions.
The Exploration Development Incentive supports junior and mid-sized mining companies by encouraging greenfields mineral exploration, and will act as a catalyst for new exploration, new investment and new opportunities in the resources sector.
Under the Tax and Superannuation Laws Amendment (2014 Measures No. 7) Bill 2014 a number of other important reforms are listed, including:
- improvements to capital gains tax rules;
- improvements to rules on involuntary superannuation rollovers;
- shifting tax complaints investigation to the Inspector-General of Taxation; and
- enabling stronger data sharing between enforcement agencies.
The Association of Mining & Exploration Companies chief executive officer Simon Bennison has applauded the Government for implementing the Incentive.
“The Government has recognised the need to encourage investment in mineral exploration in Australia in order to discover the mines of tomorrow and sustain the economic benefits for all Australians,” Mr Bennison said.
“AMEC has been the leading advocate for an exploration tax credit system and was instrumental in the Government adopting the EDI.
“Three reports issued in the past week highlight the need for the urgent implementation of the EDI and de-risk the market to encourage retail investors. Restoring investor confidence and providing certainty and stability for business investment decisions are crucial to improving Australia’s international competitiveness.
“Capital is extremely mobile so further damage to Australia’s reputation will see reduced investment in Australian projects and companies moving to more attractive jurisdictions.
“In 2014, 47 percent of capital raised on the Australian Securities Exchange for mineral exploration was invested globally.
“SNL Metals & Mining’s World Exploration Trends 2015 reports a 26 percent decrease in 2014 worldwide nonferrous metals exploration budgets, stemming from investor wariness of the junior sector and producers scaling back their exploration spending.
“Whilst there was a small increase in mineral exploration expenditure and metres drilled on new deposits in the Mineral and Petroleum Exploration, Australia December 2014 quarter results from the Australian Bureau of Statistics, there is still a long way to go to restore equity between investments on new compared with existing deposits.”