PERTH (miningweekly.com) – The Minerals Council of Australia (MCA) has again urged the Victorian government to rethink its plans to apply a 2.75% gold royalty from 2020 onwards.

In its submission to the state government’s Regulatory Impact Statement on Imposing Royalties on Gold, the MCA said that while the industry did not oppose the introduction of a ‘carefully considered gold royalty that was fit for purpose’, the royalty being proposed was announced without consultation or warning.

The MCA's executive director for its Victorian division, James Sorahan, said that the government should admit that it got the design wrong and needs to start again in the interest of workers and communities in regional Victoria.

“The proposed royalty was announced without consultation and without warning.  It has been rushed and poorly designed. Poor policy process leads to flawed policy, which will impact regional jobs and industry.  

“Victoria’s mining industry seeks a fair and transparent consultation process. A delay in the implementation of the royalty until after a comprehensive consultation process in 2020 is the sensible way forward.”

Sorahan said that the minerals industry has attempted to work with government to make modest and sensible changes to the royalty to remove harmful impacts the current design would have on regional development, including the introduction of an exploration offset to remove impacts on reinvesting in exploration which is the lifeblood of gold mining, and a progressive royalty rate structure with a gold price floor to reduce impacts on Victoria’s competitiveness for global gold investment.

The MCA was also suggesting a staged implementation to reduce retrospectivity.

“Imposing a new tax which handicaps the ability of mines to grow and deliver greater benefits to the community is a massive blunder,” he said.

He added that as currently proposed, the gold royalty will not meet the government’s own objective of securing a sustainable revenue source to benefit the community.

“Consideration of a royalty should take place at the same time as the government’s planned review of mining licence fees next year and after the Victorian government rates review hands down its findings in March 2020.

“Mining is an important part of many regional communities including Bendigo, Ballarat and Stawell. Without reform of the gold royalty structure, this is put at risk.”