The Association of Mining and Exploration Companies (AMEC) has issued a stark warning that proposed changes to capital gains tax in the 2026 Federal Budget could jeopardise the next major mining discovery in Australia.
Concerns over investment deterrence
AMEC chief executive Warren Pearce said the changes would make Australia a less attractive destination for exploration investment, potentially leading to a decline in new discoveries. "If we make it harder for investors to get a return, they will simply take their money elsewhere," he said.
The proposed reforms would tighten the capital gains tax regime for mining companies, reducing the concessions previously available for exploration and development. Industry experts argue that exploration is already a high-risk, high-cost endeavour, and further tax burdens could stifle activity.
Impact on junior explorers
Junior mining companies, which often rely on capital gains tax concessions to attract funding, would be particularly hard hit. "Junior explorers are the lifeblood of new discoveries. Without them, we risk missing out on the next big find," Pearce added.
The warning comes as the federal government seeks to balance the budget amid rising debt levels. However, AMEC argues that the long-term economic benefits of mining discoveries far outweigh the short-term revenue gains from tax changes.
Call for consultation
AMEC has called on the government to consult more broadly with the industry before finalising the changes. "We understand the need for fiscal responsibility, but these changes could have unintended consequences for the entire mining sector," Pearce said.
The budget is due to be handed down next week, and the mining industry will be watching closely for any adjustments to the proposed measures.
