Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Senator the Hon. Matthew Canavan
Minister for Resources and Northern Australia
Senator for Queensland
Date: Monday, 19 March 2018
The Coalition Government is supporting smaller exploration companies to undertake “greenfields” mining exploration and so make mineral discoveries crucial to the Australian economy, thanks to legislation that passed the Senate today.
Minister for Resources and Northern Australia Matt Canavan said that, through the Junior Minerals Exploration Incentive, the Government would provide $100 million over the next four years to allow greenfields exploration programs to distribute their tax losses as a credit to Australian resident shareholders.
“The Government recognises the critical role that smaller, or ‘junior’, mineral explorers play in maintaining a healthy and vibrant resources sector, and we are committed to supporting this sector.
“Greenfields mineral exploration underpins the Australian resource sector by finding new mineral deposits and ensuring a strong investment pipeline.
“Our Government is focused on promoting investment and driving economic activity. Ongoing exploration and the discovery of new mineral resources are essential to the longer-term future of Australia's resources sector. They are also the vital components for the tools of our modern economy – from smartphones to solar panels.”
Minister for Finance Mathias Cormann said the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 amended the tax law to replace the former Exploration Development Incentive with the Junior Minerals Exploration Incentive.
“This tax incentive will encourage junior explorers to take risks and to have a go at discovering the next large-scale mineral deposit,” Minister Cormann said. “We want to back these businesses.
“We are working to get the economic fundamentals right to build a strong prosperous Australia, improve the business climate and unleash our economic potential. We are doing so to create a stable platform for investor confidence and growth.”
Minister Cormann said this new incentive entitled Australian resident investors in small minerals exploration companies to a refundable tax offset (or where the investor is a corporate tax entity, additional franking credits) if the company in which they have invested issued them an exploration credit.
“The ability of an exploration company to give up their tax losses to distribute credits to investors as a tax offset will make investing in a junior explorer much more attractive,” he said.
Minister Cormann said mineral exploration acted as a catalyst for new investment opportunities and job creation while supporting local businesses in regional communities across Australia.
“This incentive builds on the exploration development incentive, which ceased in 2016-17, and has been developed based on industry feedback.
“It aims to improve on the timeliness of the offset and to target new investors that participate in new capital raisings. This will help maximise the incentive for additional investment in minerals exploration.”
Minister Canavan said that, despite good prospects, Australia had not had a world-class minerals discovery in more than 20 years.
“Expenditure on greenfields exploration declined by almost 70 per cent over the five years to 2015-16. This incentive will make it more financially attractive for our mineral explorers to find resources in untapped regions, continuing discovery of quality resources.”
For Minister Cormann: Karen Wu - 0428 350 139
For Minister Canavan: Martin Bowerman - 0424 303 189