The Association of Mining and Exploration Companies (AMEC) is engaging with the Australian Government in response to the proposal to amend the capital gains tax setting.
Capital gains tax (CGT) refers to the tax paid on profits from disposing of assets including investments, such as property, shares, and crypto assets.
In the 2026-27 Commonwealth Budget released earlier this month, the federal government announced the proposal to remove the current 50% CGT discount first introduced in 1999. The discount allows taxpayers to reduce their taxable capital gain by half rather than adjusting for inflation.
The federal government is also proposing to re-introduce CGT base indexation, as well as introduce a minimum tax rate of 30%, which will apply to real capital gains occurring from 1 July 2027.
Under this system, the original purchase price of an asset is adjusted upwards in line with inflation — meaning that only real capital gains, such as the profit exceeding inflation, is subject to tax.
In addition, the federal government will consult on the interaction of the capital gains reform and incentives for investment in early-tax businesses, and whether exemptions are appropriate.
Effectively, what this means is that a higher CGT will be imposed on mineral exploration shareholders.
AMEC says it is “actively against” these proposed changes, as they relate to mineral exploration and “damage” the investment attractiveness of the industry for retail investors.
Junior explorers
According to the Minerals Council of Australia (MCA), junior explorers across the western world have transformed mineral discoveries.
In 1980, junior explorers only made 10% of new western world mineral discoveries, with larger companies and governments making up the rest. In 2023, junior explorers accounted for 77% of those discoveries — a complete turnaround in less than 25 years.
The MCA says changes to CGT in the latest federal budget could bring that progress to a halt in Australia.
The federal government’s latest proposal also comes off the back of the axing of the Junior Minerals Exploration Incentive (JMEI), which expired in June 2025.
JMEI encouraged investment in small minerals exploration companies conducting greenfields mineral exploration in Australia. Eligible companies were able to generate tax credits by choosing to give up a portion of their losses from greenfields mineral exploration expenditure.
According to the Australian Taxation Office, these tax credits were then distributed to investors who purchased newly issued shares in the eligible entity during a certain period.
In light of the federal government’s latest proposal in the budget, the MCA says the solution to this issue is twofold.
“Reinstate the JMEI as a permanent annual scheme and remove the annual cap on credit allocations as part of the JMEI program, and retain the 50% CGT discount for small mineral explorers,” the MCA says.
Write to Aaliyah Rogan at Mining.com.au
Images: AMEC
