Concerns around the possibility of a minority government being formed at the upcoming Australian election has the mining industry waiting with bated breath.
Anthony Albanese last week formally called the election for 3 May, dissolving the 47th parliament and kicking off a five-week campaign.
While the two major parties have outlined some policies in favour of the mining sector, the Association of Mining and Exploration Companies (AMEC) would like to see more support from the major parties as well as independents.
“The fundamental concern is if there is a minority parliament, which looks like probably the most likely outcome, knowing who’s going to be the major government partner, that obviously deals in a range of independents of other parties that have got some views that industry would certainly be concerned about,” CEO Warren Pearce tells Mining.com.au.
“Depending on how that stuff plays out, there certainly could be some quite difficult challenges industry has to face in an environment that may not be the most welcoming parliament.
“What we’ve always wanted out of the federal parliament, and then all state parliaments and territory parliaments, is bipartisan support for our industry. It’s just too important.
“When you’re essentially the underlying backbone of the economy, these things shouldn’t be argued over. Approaches might differ, but ultimately you want policies that provide the certainty for continued investment in the sector and to continue to support those projects to succeed and return revenue to government that helps pay for a whole range of other things.”
Western Australia faced a similar problem for the second time in history following the state election in early March. There was a period of uncertainty while votes were counted as to who would head the opposition – Nationals or Liberals. The Liberal Party ended up regaining the opposition after losing the position to the Nationals in 2021.
Mining as an industry accounts for over 12% of Australia’s total economic output, according to February 2025 data provided by the Reserve Bank of Australia, making it the largest driver of the country’s economy.
Resources is also Australia’s biggest export, accounting for 59.5% of the total export share. The two key export commodities are iron ore and coal.
The exploration sector in particular has struggled in recent years with market uncertainties making it difficult to raise cash and invest in making greenfields discoveries.
Data from the Australian Bureau of Statistics shows that in the December 2024 quarter exploration spend remained constrained, coming in 2.4% lower than the September quarter at $992.3 million.
Exploration spend for the entire year fell 7.3%, or $312 million, to $3.95 billion compared to 2023, despite a stronger second half.
Greenfields exploration spend dropped 3.5% in the December quarter and 15.9% in 2024.
“Some of that appears to be coming back, but frankly, it needs more support,” Pearce says.
“So we’re looking for policies out of both major parties in that space to try and encourage new private investment into particularly greenfields exploration, where the majority of the juniors are and where the next big discoveries are likely to be made.”
The Australian Labor Party’s election policies include the AMEC-recommended Critical Minerals Production Tax Incentive to support downstream refining and processing of Australia’s 31 critical minerals.
The initiative would provide a tax incentive worth 10% of the relevant processing and refining costs starting in the 2028 financial year.
Another policy the industry welcomes is the 35-year, $3.4 billion Resourcing Australia’s Prosperity initiative led by Geoscience Australia to accelerate the discovery of critical minerals and other resources.
While Pearce commends the Albanese-led party on those two initiatives, he says the party has not “done so well on the regulatory side”.
“What we’re looking at from the federal government is to work towards removing duplication with the states and territories,” he tells this news service.
“One of the fundamentally biggest problems is we go through two processes that are almost identical to almost produce the same result but take twice as long. We need to find ways through that.”
Pearce says while the Coalition is not offering much in terms of new incentives, the party has made “some pretty substantial promises” around regulatory measures and removing the duplication, the cost and time accompanying those processes.
However, there is not yet much detail around those policies.
“We’re looking for something similar from the Labor party, the Albanese government, because really, the proposals they put forward in that space in the last term haven’t met that test,” Pearce says.
In terms of the GST debate, there does not seem to be a great deal of concern from industry regarding a change in government igniting a fresh push for more of the resources cash cow from Western Australia – the country’s largest mining state.
Pearce does not see that as a likely outcome.
“I think the reality for the GST component is it’s largely settled and probably will stay that way for some time,” he says.
However, there is a call for an overhaul of the system to incentivise individual states to develop their own resources sectors.
“What happens now is we’ve got really differing approaches across Australia, in WA, in Northern Australia and Queensland you’ve got states and territories trying to develop their economy and continue to build that opportunity, but essentially punished for it in terms of the GST take as a consequence of success,” Pearce notes.
“Then you’ve got states that are really pushing away and starting to put policies on in southern Australia where they don’t want resource developments, they don’t want gas, they don’t want minerals developments in certain areas, all of which means it has to be subsidised somewhere else.
“What we would actually like to see is a system that incentivises places like New South Wales and Victoria to get more serious about investing in that space and developing their own natural resources, ultimately, which helps grow that pie.”
Pearce says following years of advocacy by AMEC on behalf of industry, the organisation is now in a “reaction and response phase” to what each party lays out in terms of policies that will impact the mining sector.
“I’m still very hopeful that the Junior Minerals Exploration Incentive will receive a commitment in the next four or five weeks,” Pearce says.
“Of course we’d love to see a commitment from the opposition around something in that space as well. So we continue to push for good commitments, but ultimately now that work’s mostly been done it’s around seeing what actually emerges and making sure people understand what that means for the resources sector.”
Write to Angela East at Mining.com.au
Images: iStock
