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A State Government-administrated safety fund has been left almost $10 million in deficit through financial incompetence, Western Australia's peak mining body says.
Key points:
- The fund is used to pay for consultation, train inspectors and other safety measures
- The mining industry blames mismanagement by the department of petroleum, but the department notes levy payments are down
- The fund receives about $30m per year from mining companies
The Association of Mining and Exploration Companies (AMEC) chief executive Simon Bennison said the Mines Minister had advised a levy which pays into the fund would have to be increased by 33 per cent next financial year.
"In managing a $30 million annual operating budget, the Government has now found that the trust fund is approximately $10 million in deficit," Mr Bennison said.
"Operating costs have increased by over 50 per cent in five years with no clear explanation.
"This is an unbelievable and unsatisfactory development which will have a major cost impact across the whole mining and mineral exploration industry."
The mining industry pays a levy which is kept in a trust fund administered by the Department of Mines and Petroleum.
The funds are used for activities which regulate safety in the mining industry, including stakeholder consultation, safety inspector training, and improved transparency.
But AMEC says under management by the department, the coffers have run dry.
He also claimed the department was using the levy increase to cover costs of the multi-million-dollar deficit.
"The ability of the department to cover the costs of their operations in relations to the levy have clearly displayed a clear deficiency, which now leaves us with a deficit that is excessive," he said.
"We are seriously concerned … and the industry is concerned about the lack of transparency with the whole situation."
The Department of Mines and Petroleum annual report 2015/2016 says there were lower-than-forecast levy collections in that year.
According to the report, the fund's deficit has increased from $3.5 million in 2015 to $9.8 million in 2016.
The 2016/17 budget estimates income from the levy to go from $22.9 million in 2014/15 and $33.6 million in 2015-16, to $31.1 million in 2016/17.
It notes income from the levy was down by $3.7 million in 2015/16.
Former government to blame: Marmion
Mines Minister Bill Johnson said in a statement, the increase in the safety levy was due to mismanagement by the former government.
"The former Liberal-National government failed to manage the Mines Safety Levy," he said.
"They have left a $10 million deficit to the incoming Labor Government.
"We have been forced to act to fill in this deficit."
He said the Government would work with AMEC to improve management of the levy in the future.
"We accept this situation can't be repeated, so I have written to AMEC and the CME to engage on a new way forward to improve governance of the levy for future years," he said.
Topics: business-economics-and-finance, mining-industry, wa