With the election now out of the way and a new Government sworn in Senior Associate, Leanne McClurg takes a look at the Coalition’s Policy for Resources and Energy and provides some dot points on what that policy has in store for industry:
- Abolition of the carbon and mining taxes.
- Changes to the environmental approvals processes. The Coalition will look to cut green tape thereby encouraging timely commencement of new projects. State and Territory governments will likely be offered the opportunity to act as a ‘one stop shop’ for environmental approvals and, if they agree, would administer a single approvals process including approvals under both state and commonwealth legislation.
- An incentive scheme to encourage mining exploration (see further details below).
- A gas supply strategy to address the potential gas supply shortage in Eastern Australia. The Coalition indicated it will put in place, through the Standing Council on Energy and Resources, mechanisms to provide greater transparency of gas trades, gas pricing and supply.
- A Coal Seam Gas management policy which supports access to prime agricultural land only where the farmer agrees, where there is not long term damage to underground water supply and where agricultural production is not permanently impaired.
- Scrutiny of applications for oil and gas retention leases. The Coalition has indicated its commitment to developing fields and bringing them online.
- A new Energy White Paper to be delivered within twelve months.
- Formalisation of the agreement to sell uranium to India.
- Resolution of community concerns over wind farms.
- Greater consultation with industry.
The Exploration Development Incentive
The coalition’s Policy for Resources and Energy contains an Exploration Development Incentive (EDI) that will allow investors to deduct the expenses of mining exploration against their taxable income. Senior Associate, Leanne McClurg sets out what we know about the EDI so far.
- The incentive is designed to target small exploration companies as it limits eligibility to those with no taxable income.
- It will apply to investments made from 1 July 2014.
- The incentive will be capped at $100 million.
- The ATO will determine a proportion of expenses that can be claimed as tax credits by investors.
Final implementation details are yet to come and will be determined in consultation with peak industry representative bodies, with a review every 12 months. We will update you on these details in coming editions of Resources Update.