Tuesday, 16 June 2026

 David DAVIS (Southern Metropolitan) (22:15): (2590) My matter for the adjournment tonight is for the attention of the Minister for Energy and Resources, and it relates to changes made or announced in the Commonwealth budget, the 2026–27 budget, which seek to replace the 50 per cent capital gains tax discount with a discount based on inflation and introduce a minimum 30 per cent gains tax from 1 July 2027. I am in receipt of correspondence from very many parts of the minerals and mining sector, and they seek that the minister for resources in Victoria puts this on the agenda for the next meeting of resources ministers and that these matters are discussed, bringing those ministers to a position where they can bring some weight to bear on the federal Treasurer and the Prime Minister. They have brought forward this capital gains tax change, but it is going to strike hard. Exploration and resource development, as you will understand, is vital to the state of Victoria and its economy. Small ASX-listed mineral exploration companies rely on a relatively small pool of retail investors to raise capital to fund their entire operations. Without the grant of an exemption, the concern is that this tax reform threatens to undo the hard work they do to drive greater mineral exploration and to find the mines of the future.

I am very much of the view that the minister is in a position to bring this forward with her equivalent colleagues in resources in other states and to take a united front to the federal authorities. As I say, the proposed changes will have a significant impact on Australia’s mineral exploration sector and in particular on Victoria’s mineral exploration sector. We need to stand up and fight for our miners. This is another nasty hit from the federal government. It has not been thought through properly. The impacts on exploration and mining have not been understood. These are very high risk businesses. Early-stage decisions are very high risk. There is no steady production at that point. There is a high chance of failure. In fact some people say one in every thousand exploration projects becomes an operational mine, so it is a very high risk sector. Banks and super funds avoid these areas. The capital gains tax discount makes the potential pay-off big enough after tax for retail investors to take that risk. If the proposed capital gains tax changes proceed without a mineral exploration exemption, junior explorers will face reduced capital, leading to fewer discoveries, mines and government revenue. This is a silly decision by federal Labor, and it is time state Labor stood up and said, ‘We’re opposed to this.’ We need to look after our miners and make sure their returns and incentives are strong.