Key: No increase to mining royalties in budget

The government’s proposal to open up parts of the Coromandel, Great Barrier Island and Paparoa National Park for propecting and possibly mining has kicked up quite a fuss in recent weeks, as acknowledged by Prime Minister John Key at a National Party conference on Sunday.

Speaking at yesterday’s post-cabinet press conference, Mr Key suggested new mining in non-schedule 4 conservation land as a possible meeting ground between public opinion and economic wellbeing.

“There are opportunities for New Zealand outside of schedule 4 and I think that’s something the government needs to consider,” he said.

“I think it’s fair to say that they’d be likely to be more acceptable to the NZ public than schedule 4 land, which is obviously of a higher conservation value.”

Mr Key pointed out that mining in lesser value areas of the conservation estate already exists, and has done so for some time.

The question of royalties

While their conservation value is rated at less than schedule 4, mining in areas like the Kaipara Harbour and Golden Bay, both named as areas of interest in the schedule 4 discussion document, may still meet with substantial opposition from local communities.

Increasing mining royalties may offer an added incentive to the public but will have to be weighed up against New Zealand’s need to attract investment from overseas mining companies.

A spokesperson for the Energy Minister confirmed in March that current mining royalty levels were under review as part of the minerals stocktake, but was unable to indicate the direction of the change.

Pressed on the issue yesterday, Mr Key said that New Zealand was not in a position to consider a super tax on resource profits like the 40% hike announced by Australia last week.

He said that current royalties and jobs created by mining activity were sufficient evidence that mining delivered economic benefits to New Zealand.

When asked whether if the government was considering any increases to current royalties, Mr Key said that no increases would be proposed in the budget.