PERTH (miningweekly.com) – Resources industry bodies in Western Australia have expressed concerns over the state government’s 2013/14 Budget, with the Chamber of Minerals and Energy (CME) expressing disappointment that election promises had not been kept.

The Australian resources sector was expected to deliver a total revenue of A$6.9-billion to the state, including royalty payments of A$5.8-billion.

“Royalty income from the sector now accounts for 21% of government revenue up from only 5% in 2003/04,” said CME CEO Reg Howard-Smith.

In his announcement, state Treasurer Troy Buswell highlighted how exports were expected to become the key driver of economic growth over the forward estimates as major resource projects transition from construction to production.

“Our economy is supported by ongoing work on a number of large liquefied natural gas and iron-ore projects, but the flow of new projects has eased and business investment in Western Australia appears to have peaked although [it is] still expected to stay at historically high levels,” the Treasurer said.

He pointed out that an imbalance had emerged between growth in the state’s expenditure and growth in revenue.

“This brings significant financial challenges, as major resource projects transition from a construction phase to a production phase - the demand for labour has begun to ease, and so has growth in the state government’s tax revenue.”

Howard-Smith stated that despite the significant and growing contribution the resources sector made to the state’s economy, the CME was disappointed that two key election commitments made during the state election earlier this year had not been funded in the 2013/14 state Budget.

“During the election campaign industry welcomed the announcement of the expansion of the approvals tracking system into other agencies and the development of a publically available online biodiversity library,” said Howard-Smith.

“While disappointed to not see funding today, CME understands that the government remains committed to the introduction of these initiatives and looks forward to full implementation,” he added.

CME also expressed concern that state net debt levels continued to spiral, putting additional pressure on Western Australia’s AAA credit rating.

“Maintaining our triple AAA credit rating is important to ensure Western Australia continues to attract foreign investment,” said Howard-Smith.

“In an increasingly internationally competitive environment, governments need to have policies in place to attract investment and promote economic development and loss of this rating would add another unnecessary burden to the resources sector.”

The Association of Mining and Exploration Companies (AMEC) has meanwhile expressed concern that a consumer price index (CPI) increase and a phased increase to the payroll tax threshold might impact Western Australia’s competitiveness.

“The cost involved in mining and mineral exploration in Western Australia has taken a further hard hit in the Budget announced today,” said AMEC CEO Simon Bennison.

“At a time when every dollar is critical to all companies the Budget will have an adverse impact on the bottom line and make Western Australia a less favourable place to operate. We are already seeing an increasing proportion of business and investment heading offshore to places such as Canada and Africa. This Budget will not change that trend or improve international competitiveness.”