A global survey showing that Australian states are declining in attractiveness as potential mining investment destinations is a big wake-up call for state governments.

It is alarming to note that some Australian states are only just ahead of tiny African nations like Burkina Faso in perceptions of government policy that influence mining exploration investment.

The declining policy competitiveness of many Australian states, revealed by the Fraser Institute Annual Survey of Mining Companies 2017 reported in The Australian today, shows governments have to do much more to retain competitiveness for our mining sector against  rising international competition.

Australia’s world-class mining sector is handicapped by over-regulation, red tape and duplicated environmental laws across most jurisdictions – all of which limits job creation and prosperity, especially in regional communities.

The Fraser Institute is a Canadian-based think tank that conducts an annual survey of mining company executives on their perceptions of different mining regions around the world. It rates the overall investment attractiveness of a region based on its geological attractiveness and perceptions of government policies that influence exploration investment.

Policy factors examined include uncertainty concerning the administration of current regulations, environmental regulations, regulatory duplication, the legal system and taxation regime, uncertainty concerning protected areas and disputed land claims, infrastructure, socioeconomic and community development conditions, trade barriers, political stability, labour regulations, quality of the geological database, security, and labour and skills availability.

While Western Australia still ranks high on Investment Attractiveness (5th in 2017 although dropping from 3rd in 2016), it has slipped dramatically in its policy ranking (17th in 2017 compared to 9th in 2016).  This source of competitive advantage in attracting exploration and mining investment is diminishing across many Australian states, with the latest survey responses showing some large drops in the Policy Perception Index scores for NT, Victoria and Western Australia and their relative rankings against other mining regions.

Northern Territory saw a large reduction in its score and rank, moving down to 33rd (of 91 jurisdictions) from 22nd (of 104) last year.

Although New South Wales’ global ranking improved, its index score still decreased. Both New South Wales and Victoria have been ranked in the bottom half of surveyed regions this year and have received ratings which rank them as having comparable policy settings to Burkina Faso (ranked 55), Ghana (51) and Guyana (56). Fiji, ranked 37, outscored both states as well.

Australian regions scored particularly low on ratings of taxation regimes, with less than 9 per cent of respondents rating existing tax systems as ‘encouraging investment’. This was far below the +30 per cent scores received by top-rated regions such as Finland, Ireland, Saskatchewan and Sweden.

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