The Chamber of Minerals and Energy of Western Australia (CME) has welcomed the Government’s commitment to fast-track rates changes for valuation of mining and petroleum exploration tenements.
“The resources sector has witnessed extraordinary local government shire rate increases in the 2014-15 year where some ratepayers have had increases of several thousand percent,” said CME Chief Executive Reg Howard-Smith.
“These significant cost increases are not sustainable and have a major impact on a company’s ability to appropriately budget, source cash funding and attract investment into exploration and resources projects,” said Mr Howard-Smith.
Industry is hopeful the new legislation will reduce and stabilise valuations used in determining local government rates by dropping the five times multiplier on petroleum permits and ensuring the unimproved value of mineral exploration licenses is calculated on the rent payable in their first year, without escalating based on the period the license has been held.
“CME have actively compiled several examples of substantial increases in rates payable from industry members. These aggregated examples formed the basis of CME input to the Department of Minerals and Petroleum,” said Mr Howard-Smith.
While today’s announcement is welcome, ongoing concern exists with regards to the approaches by local governments in relation to rates payable.
“CME will continue to work with Government to provide a solution which provides stability for industry and a suitable return for local governments,” said Mr Howard-Smith.
