Cutting Red Tape That Binds Mining

Written by:
3 August 2016

To secure Queensland’s mining future, cutting onerous red tape must be a key reform priority.

Given the outlook for economic development in China, India and other developing countries, mining is likely to remain a Queensland mainstay in the years and decades to come.

Although renewable energies have a place in future world energy supply, the fact is millionsin the world rightly want reliable and affordable power to improve their lives.

So even if mining booms one and two of the previous decade have passed, reports of the death of the state mining sector are premature.

Considering the direct and indirect effects of mining, recent figures show it contributes 22 per cent to Queensland’s gross output, provides $22 billion in wages and salaries and supports up to 366,000 jobs in the state.

These big numbers are difficult to ignore and the secret to building on these positive impacts is to ensure government policies are as unobtrusive as possible to mining sector growth.

And a central focus of unobtrusive policy, going forward, is that unnecessary and expensive red tape on exploration and production is reduced, and regulatory standards are improved to reflect world best practices.

The Institute of Public Affairs estimates the cost of regulation stands at a massive $176 billion a year, with the mining sector especially burdened.

Excessive regulations are reflected in the delays associated with opening a mine, with one Minerals Council study finding that Australian thermal coal projects suffered 1.3 years additional delay relative to competitor countries.

But delays can tie up mining ventures for much longer. The $22 billion Carmichael mine project took more than six years to gain approval. Even then, delays persist with environmental and other activist groups eager to tie up the project approval process in the courts.

Mining companies and industry associations argue the sheer mountain of licences and permits required generates extensive compliance costs via paperwork, specialist adviser fees, and so on.

There is little question the costs from regulatory impositions hamper investor sentiment, with a Queensland Resources Council study showing “poor and uncertain regulation” is a great concern. Seventy per cent of CEOs surveyed said that environmental policy and regulatory reforms were the issues most pressing for them when operating in Queensland.

By no means does all this suggest the best response is to eliminate all regulatory approvals, licences and permits. Rather, the issue is to find the sweet spot that achieves public policy objectives at minimal costs.

Eliminating unwarranted red tape and getting better regulatory standards, will ensure we don’t miss out on future waves of mining sector growth. For the sake of Queensland mining’s prosperous future, we must fix mining overregulation.


This article appeared in the Courier Mail on the 3rd of August, 2016


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