New Zealanders want mining firms to pay higher royalties and new super tax on profits

Sunday 23 May 2010, 1:18PM
By New Zealand Business Council for Sustainable Development

Sixty per cent of New Zealanders believe royalties paid by mining companies are inadequate.

Royalties for mining Schedule 4 land would need to be above 30% for a majority of New Zealanders to feel satisfied the economic benefits and effects on the environment are balanced.

Support for New Zealand having a 40% super tax on mining company profits, as announced in Australia, is supported by more than twice as many as oppose, according to a national ShapeNZ online survey of 2,215 New Zealanders, conducted between May 13 and 18. Weighted to represent the national population, the poll has a maximum margin of error of +/- 2.1%.

The survey also finds New Zealanders, while evenly split over mining’s management of its environmental and other impacts in the past, do not trust it to fully restore any Schedule 4 land which it might mine.

Currently mining companies pay the Government a royalty of 1.5 % of net revenue from the first $1.5 million from selling gold, silver and platinum group minerals. On net revenue of more than $1.5 million the royalty rises to 2%.

The royalty paid for extracting other high volume, lower value, minerals – like rocks for roads, coal, limestone and peat – ranges from 10c to $1.50 per tonne sold.

Asked if these royalty payments to the Government provide an adequate or inadequate reward to New Zealand for extracting these mineral resources

• 60% say they are inadequate (32% say very inadequate)
• 15% adequate (2% say very adequate)
• 23% don’t know.

There is agreement among voters for all parties that royalties are inadequate, including 53% of those who voted National in 2008, 45% of those who voted Act, and 79% of Maori Party, 65% of Labour, 81% of Green and 90% of United Future voters.

A 40% super tax in addition to royalties has 46% support, while 20% oppose and 34% don’t know.

Among business decision makers (a sub sample of 555 managers, proprietors, self employed and professionals, maximum margin of error +/- 4.6%) support for a super tax rises to 49%, while 29% oppose and 23% don’t know.

Industry responsibility

New Zealanders are evenly split on whether or not the local mining industry has been responsible in managing the effects of mining on the environment and local communities, though nearly a third don’t know.

• 35% say it has been responsible (7% of those say very responsible)
• 34% say it has been irresponsible (11% of those very irresponsible)
• 31% don’t know.

Distrust on restoring Schedule 4 land

A majority (51%) say they do not trust the mining industry to fully restore Schedule 4 areas after mining is complete. (Of these 25% completely distrust the industry and 26% distrust).

Some 25% trust the industry to fully restore (14% have slight trust, 11% full trust), while 15% neither trust nor distrust. 9% don’t know.

Confidence in RMA

Subjecting exploration of land which might be removed from Schedule 4 to the normal planning and environmental protection procedures under the Resource Management Act does not find favour.

46% oppose exploration subject to normal RMA protection, while 34% support. 15% are neutral and 6% don’t know.

The results are detailed in a second of a two-part report on the survey, the most comprehensive published research covering views on each of the five areas, the Government is considering removing from schedule 4, to allow applications for prospecting and mining to be considered on a case by case basis.

The research was commissioned by the New Zealand Business Council for Sustainable Development.

While a majority of New Zealanders acknowledge mining on Schedule 4 land’s royalty revenue, jobs and economic growth and wealth benefits the majority still oppose it.

The greatest opposition (60%) is to exploration and mining on much of Rakiura National Park, covering about 85% of the Stewart Island, where Schedule 4 applies. 22% support applications for exploration and mining there being permitted on a case by case basis.

Opposition to Schedule 4 removal is 56% for each of the northern part of Coromandel Peninsula and Te Ahumata Plateau on Great Barrier Island (26% support).

Some 55% oppose Schedule 4 removal from the Otahu and Parakawai geological areas in Coromandel Forest Park to the peninsula’s south (26% support).

Some 53% oppose Schedule 4 removal in the Inangahua sector of the Paparoa National Park, while 26% support.

The Government has extended submissions on the issue until May 26 and expects to make a decision in June.

ShapeNZ’s Part 2 report, covering royalties issues, is available at www.nzbcsd.org.nz

Part One results, covering removal of land from Schedule 4, are available at http://www.nzbcsd.org.nz/story.asp?StoryID=1163.

The research results do not reflect the views of the Business Council. ShapeNZ research is commissioned to allow public input on sustainability policy issues.

ShapeNZ is a member of the Market Research Society of New Zealand and follows its code of ethics for online and other research.