AMEC chief executive Simon Bennison said the METC would allow current eligible losses to be passed back to shareholders in the form of a tax credit through the franking system.
“The METC will stimulate the greenfield exploration sector which has not seen an increase in actual metres drilled for over a decade, despite one of the strongest periods of growth in the Australian mining industry,” he said
“It will also increase the rate of discovery and lead to the mines of tomorrow and provide future revenue streams for governments.
“The METC will be a win:win for Australian investors, Australian exploration companies, Australian communities and Australian governments at all levels (through additional corporate and personal tax, royalties, state taxes, fees and levies).
“It will also be a stimulus to the Australian economy and ultimately contribute to a reduction of the national debt.”
Companies with income from existing mining operations will be ineligible.
AMEC commissioned a KPMG report on the METC, which found that a multiplier factor of two in additional exploration activity would result in potential annual tax revenue stream to the government of up to $A283 million, up to 4356 additional jobs and a $2.2 billion contribution to Australia’s gross domestic product.
The group proposes a start date of January 2015, which would see the federal government invest around $50 million in the 2017 financial year, $101 million in FY18 and $133 million in FY19.
“The challenge is for the political parties to have the vision now to create investment strategies and catalysts that are 10-15 years from when these revenue streams are fully achievable,” Bennison said.
“Jobs and other social and economic benefits are achievable in the short term.
“It is essential that all political parties remove any perceptions about the current mining industry, and think about the development of mines for the benefit of future generations.
“The time is to act now by amending tax laws which will free up tax losses already owned by investors, which can then translate into the mines of tomorrow.”
AMEC vice president Mike Young said last month that the group were confident the proposal would be enacted, whichever party won this year’s federal election.
AMEC has long expressed concerns over the future of the exploration sector in Australia.
Bennison cited University of Western Australian research from last year that found discoveries were reducing, getting deeper and harder to find and investment was heading offshore.
“It also found that the national mineral inventory is gradually being depleted and the mining industry is becoming unsustainable in the long run,” he said.
“The research highlighted that about half of Australia’s non bulk commodities mines would be exhausted in seven to 18 years.
“As it takes on average seven years to convert a discovery into an operating mine these trends are alarming.
“There is a desperate need to discover the mines of tomorrow to ensure that future revenue streams from base metals do not dry up.
“The METC will provide one policy solution that will help address the several declining trends in mineral exploration already identified by the University of Western Australia, assist in discovering the mines of tomorrow and contribute to future revenue streams.”
