PM Promises New Tax Incentives to Encourage Investment
The poor economic outlook and gripes over WA’s share of GST income saw the state’s opposition this week discuss a “WAxit” option to break from the Commonwealth of Australia.
Speaking at the Western Australian Liberal Party conference in Perth on Saturday, Prime Minister Malcolm Turnbull announced new tax incentives for junior exploration companies in a move he said would encourage investment and “risk taking” Turnbull said the new Junior Mineral Exploration Tax Credit (JMETC) would allow the tax losses in greenfield exploration companies to be distributed as a credit to Australian resident shareholders.”These tax incentives will encourage ‘junior explorers’ to take risks and to have a go at discovering the next large-scale mineral deposit,” Turnbull said.
“We want to back enterprise. We want to turn around the greenfields minerals exploration expenditure that has declined by almost 70 percent over the past five years.”
Under the scheme, Australian resident investors of junior explorer companies will receive a tax credit where the exploration company chooses to give up a portion of their losses relating to their greenfields exploration expenditure in an income year. Resource Minister Barnaby Joyce said the credit would make it more financially attractive for mineral explorers to find resources in untapped regions. “Despite good prospects, Australia has not had a world-class mineral discovery in more than twenty years,” Joyce said. Only newly-issued shares relating to capital raising for investment in new greenfields exploration activity will be eligible for these tax credits.