Leaders: Gold tax needs a rethink

Stawell Gold Mines leaders have warned a State Government plan to introduce a gold royalty next year could cripple the business.

The government announced it would apply a 2.75-percent tax on mines producing more than 2500 ounces of gold a year from January.

Stawell Gold Mines general manager Troy Cole said while he was not opposed to the concept of a gold tax, he argued it should not be applied evenly across the board.

“The message I’ve been putting out to the State Government and also the local community is that we don’t oppose royalties, but it needs to fit different business models,” he said. “One size does not fit all would be the term I would use.

“The policy that’s presented falls short in consideration to how it should be applied in different settings.

“In an ideal world they’d have a more sensible policy that those businesses that are set up and mature enough to realise the royalty will take it on board.

“Those places that are not at that stage should have a different approach applied that encourages investment and encourages the start-up of the industry.

“When you have very rich ore bodies generating a lot of wealth, that would be a little bit different, but when you’re in a marginal environment and the business is in start-up and you’ve got heavy capital investment going in, you need special considerations.”

Mr Cole said a 2.75-percent tax on the mine – which reopened about a year ago after shutting down in late 2016 – would have a flow-on effect on the mine’s employees and the Stawell community.

“It means there will be a percentage of the benefits created by our activities that get taken away,” he said.

“It’s another thing that keeps chipping away and one day the loadings on your business will be too great.

“It is 100 percent certain that it will erode investment into sustainable capital, it is 100 percent certain it will erode investment into exploration, and it is 100 percent certain it will erode employee benefits into the future.

“When the gold mine shut three years ago it put hundreds of people out of work, and one day the same sort of thing could happen again.

“That takes multiple millions of dollars out of communities.”

Too quick

Minerals Council of Australia, MCA, Victorian executive director James Sorahan said the government needed to rethink the royalty.

He said it had been brought in too quickly and with too little consultation.

“Treasurer Tim Pallas needs to start again on his new gold tax by announcing a fair and proper consultation process,” he said.

“There are smarter ways to go about tax reform. The jobs of blue-collar workers in Victoria’s gold regions are too important to risk with a rushed implementation of this new tax.

“Victorian minerals companies and the many regional communities that depend on gold jobs and investment only want a fair go and a fair hearing.

“The Victorian mining industry is ready to work with government to design a sensible royalty that meets the aim of raising revenues when gold prices are high without risking growing mines and regional jobs when prices are low.”

State Member for Ripon and Shadow Treasurer Louise Staley was critical of the royalty, labelling it an ‘attack on the region’.