PERTH (miningweekly.com) - The Western Australian Chamber of Minerals and Energy (CME) has urged Western Australian Premier Colin Barnett to have a discussion with the mining industry regarding royalty payments to the state, or possibly risk future investment potential in Western Australia.

CME CEO Reg Howard-Smith noted that suggestions that the sector was under-taxed or has not paid its way, was “simply wrong”.

The CME said on Friday that state government revenue from royalties during 2008/9 was A$3,2-billion, representing an increase of almost A$2-billion over the past five years.

The state government has also increased its revenue from industry sources through the new A$40-million mine safety levy, with other charges currently also being considered.

“We are greatly concerned about an ad hoc and cost burden approach on the resources sector, particularly in the absence of any consultation or impact assessment by government,” Howard-Smith said.

He warned that the government ran a real risk of increasing cost imposts on the resources sector to the point of damaging investment decisions.

“Industry is concerned that for the state government to proceed on a matter like this, without industry consultation, could undermine the confidence in the state’s ability to create a stable investment environment, critical for multibillion dollar investment decisions.”

Howard-Smith said that it was important for the government to appreciate the economic recovery was not uniform across the sector. “Raising royalties unilaterally without understanding the impacts on investment and operational costs could jeopardise some sectors viability and employment potential.”

The focus of the Premier’s attention should be on his recent commitment to keep a tight rein on the state’s finances and focus on delivering services more efficiently, effectively – rather than to add further cost burdens on industry, Howard-Smith said.

The resources sector continues to be a major employer in regional areas, directly employing more than 80 500 in 2008/9 with considerable employment growth forecast to support significant approved and planned project developments, the CME said.

A further 250 000 West Australians are indirectly employed as a result of the sector.

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