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STATE BUDGET 2016-17: Resources Sector Major Contributor to State Budget

CME chief executive Reg Howard-Smith said despite a downturn in commodity prices during 2016-17, royalties from the mining sector had kept the State’s growth in a positive position, with more jobs than 10 years ago.

Handing down the State Budget today, WA Treasurer Mike Nahan said the mining sector would continue to drive growth through a substantial expansion in exports.

“The resources sector is a significant contributor to Western Australia’s economy through the good times and the bad,” Mr Howard-Smith said.

“The industry provides a significant slice of revenue to WA so we welcome any initiatives which encourage further investment in the State such as the Exploration Incentive Scheme.”

The Exploration Incentive Scheme (EIS) was funded for an additional $30 million over three years from 2017-18 through the Royalties for Regions initiative, a move which is important to ensuring the future viability of the mining sector.

“The EIS ensures resources companies can continue to make significant new discoveries. The fact it will continue for another three years is an encouraging sign for industry,” Mr Howard-Smith said.

Mr Howard-Smith also welcomed the extension of the Magnetite Financial Assistance Program for an additional two years.

“Under this program, magnetite producers can receive a 50 per cent rebate on their royalty payments for 12 months, a move which would assist any industry in its infancy,” he said.

The Western Australian Biodiversity and Science Institute, which CME and its members were instrumental in establishing, was funded for four years to the tune of $5.8 million.

But he was concerned the Department for Mines and Petroleum intended to collect additional revenue from Mining Tenement Rentals to offset the shortfall from the removal of cost recovery measures for mining and exploration assessments from the forward estimates.

Mr Howard-Smith recognised the important economic reform the sale of State assets, such as the transmission and distribution networks of Western Power and Horizon Power, represented to the State Government.

These assets will join Fremantle Port as key pieces of infrastructure already identified for divesture.

“The sale of Western Power and Horizon Power’s poles and wires is an important reform for the Western Australian Government that is applauded by the mining and energy sectors,” Mr Howard-Smith said.

“CME believes the sale of Western Power represents a good opportunity for privatisation of business that is regulated appropriately.

“In saying that, when it comes to the sale of port assets, we support the development of regulatory arrangements to protect users from any abuse of a monopolistic position while balancing the delivery of a fair and reasonable rate of return for asset owners.

“The revenue from the sale of assets will in part assist in reducing the Budget deficit which regrettably has increased in this year’s Budget. Additional reductions in State Government expenditure will be needed.”