Originally published by Sunday Times Editorial of The West Australian
12.07.2026
The Albanese Government’s failure to adequately think through possible consequences of its Budget has left significant problems unresolved. One of those revolves around the future of mineral exploration.
The resources sector is the engine room of the economy and exploration is the starting point. As well as providing jobs for thousands of West Australians directly and indirectly and life for many regional communities, the resources sector is a vital source of government revenue through royalties and taxes that go towards funding the services we all rely on.
If the sector does well we all benefit.
Governments can play their part by ensuring workplace and tax laws support enterprise and innovation and boost productivity.
But the Budget holds the threat of hammering the sector with extra taxes by replacing the 50 per cent capital gains tax discount with one based on inflation and a minimum 30 per cent rate on the taxable portion. There are fears this would penalise mum-and-dad investors in mineral explorers.
Treasurer Jim Chalmers has promised an exemption for “innovative start-ups” that would preserve the previous 50 per cent discount for investment in qualifying companies. But the Chamber of Minerals and Energy WA says the proposed exemption specifies narrow criteria that would make mineral explorers ineligible.
The CME has provided a submission to the Government’s consultation on possible changes which argues for a specific 50 per cent CGT concession for junior mineral explorers in recognition of the high degree of risk they carry. CME WA chief executive Aaron Morey said it was estimated that additional capital gains tax from investors in junior explorers would total about $20 million or less in almost every year under the new system.
“That pales in comparison to the vast economic benefits that flow from successful mineral discovery, which can total thousands of jobs and billions of dollars in royalties and taxes from an individual mine,” he said. “In the vast majority of years, the very modest CGT gained from failing to carve out junior explorers is a rounding error for the Commonwealth Budget.
“But for individual mum-and-dad investors prepared to take a risk on building Australia’s future mineral pipeline, that same tax is an enormous additional impost — enough to scare off some investors completely. It would be a massive mistake to compromise Australia’s ability to discover the next generation of rare earths, critical minerals and other commodities for the sake of a relatively tiny increase in CGT revenue.”
Association of Mining and Exploration Companies chief executive Warren Pearce also warned that the proposed CGT changes would make it harder to attract risk capital in Australia.
The arguments make good sense. At a time when the Australian economy needs all the help it can get, the mining sector should be encouraged, not penalised. Dr Chalmers should take on board the arguments for making any carve-outs wide enough to allow mineral explorers to continue their crucial work.
