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Monday, 15 September 2003
Page: 19985

Mr FITZGIBBON (12:55 PM) —It was a pleasure to be a part of this important inquiry into the dramatic and alarming fall in minerals exploration in this resource rich nation. The impact of a 50 per cent reduction in exploration expenditure in the past decade should be of concern not only to the resources sector but to all Australians. I pay tribute to the member for Forrest and all members of the committee, who worked solidly on a number of complex issues in a largely bipartisan manner.

The committee has made 28 recommendations, and I am pleased no minority or dissenting report was necessary. I believe all the recommendations are worthy of support. Any criticisms of the report will inevitably be centred not on what it says but on what it does not say. Some will seek a greater call on the hard-earned taxpayer dollar; others will say that more could have been done, for example, in the area of native title rights. This is possibly so, but the committee was mindful of striking a balance between various competing interests and spending priorities.

Without selling short the importance and significance of other recommendations, I want to zero in on two which are close to my heart. The first is recommendation 2. I am disappointed that the committee did not see fit to go beyond recommending that the government merely investigate the implementation of a flow-through share scheme. The overwhelming majority of submissions to the inquiry advocated a flow-through share scheme as an effective means of addressing the fall off in exploration expenditure. It is important to know that ABARE also supports the proposal.

There exists no time for mere investigation. Labor are committed to the implementation of a flow-through share scheme and will ensure that it is appropriately targeted at small and independent exploration companies and that it is not open to abuse. We will do so by restricting the scheme to independent companies with a market capitalisation below a given figure. We will do so in consultation with the industry and other stakeholders. Given that the evidence received indicated that 70 per cent of all exploration companies have a market cap of $10 million or less, this seems an appropriate place from which to begin our consideration. Labor will also consider restricting the maximum amount of share capital that can be defined, as flow-through is 50 per cent of total share capital up to a maximum of, say, $2 million. But, again, we will have to consult more closely with the industry and stakeholders in that regard. Further, I propose that any capital losses on flow-through shares cannot be used by the initial or any other future shareholder. Further again, Labor are determined that funds raised from flow-through shares must be expended on exploration activities within a four-year period from the date of subscription. Labor will further guarantee the integrity of the scheme by initially giving it a four-year period of operation.

The second recommendation I want to quickly address is recommendation 4, which needs to be considered in conjunction with recommendation 3. Recommendation 4 deals with the assignment of property rights in offshore oil and gas reserves. Recommendation 3 proposes greater tax concessions for the upstream sector. Labor is happy to look at a more generous RRT regime where it can be justified on good public policy grounds. It will not consider it in isolation but in the context of a national energy policy. Title assigned under the submerged lands act brings both rights and responsibilities. Labor will not tolerate the warehousing of community owned, finite natural resources. An exploration lease and an initial retention lease should not become a licence to sit on a reserve forever. There should be more transparency in the manner in which retention lease renewal approval is granted, and greater accountability must be forthcoming. Under the current regulatory regime, it is too easy for a leaseholder to sit on a resource in deference to its global interests elsewhere. Labor has no intention of working against the industry. To do so would jeopardise important investment issues. Rather, Labor is interested in working on proposals which produce win-win situations for both the companies and the national interest.

The SPEAKER —Order! The time allotted for statements on the report has expired. Does the member for Forrest wish to move a motion in connection with the report to enable it to be debated on a future occasion?