Home' Australian Resources and Investment : March 2017 Contents Forum of the burden of government tape
on companies, Australia is ranked 80th
out of 140 countries.
Imagine the difference if the time and
money spent on bureaucratic tape and
compliance had been able to be channelled
into productive outcomes instead.
With over 700,000 Australians
unemployed and more underemployed,
and with our record national debt, the
question must be asked: how can we
Yet earlier this year, and astounding
to many, a wild orchid stopped the
building of a gold mine in the small
Victorian town of Talbot.
Now, I like orchids as much as
anyone, but this particular plant was
growing seven kilometres away from the
Not only was there a seven-kilometre
buffer zone, but the mine developers were
even asked to pay $900,000 to the state
government to remove grass because an
orchid may grow there in the future.
It's probably the world's most
expensive possible bouquet!
Having just completed the Roy Hill
project, my company's $10-billion mega-
mine in the Pilbara, I have experienced
rsthand the impact that excessive
regulation has on new projects.
The journey to build this mine was
a mammoth one, from acquiring the
tenements in 1993 after BHP dropped
them after their years of exploration,
nding little value, to Hancock later
exploring and nding iron ore bodies
of size and value, to, after considerable
work, high-risk investment and many
government and other obstacles, then
celebrating the rst shipment of ore in
How many approvals, permits and
licences do you think we had to complete
before construction even commenced?
I asked this question of one former
Australian Prime Minister, who guessed
'about 40'. But it wasn't 40, or 50, or 100
or 1000. It wasn't even 2000 or 3000.
There were more than 4000 pieces of
red tape that we had to deal with before
we could even start to build.
More than 4000! And then more for
construction. What small company can
pay for all that?
How many people would dedicate
high-risk money and years of effort
to undertake a project knowing that
it would require over 4000 pieces of
regulation to be complied with before
any prospect of being able to start
construction, and go through even more
tape, approvals, permits, licences and
compliance before producing income?
For a project like Roy Hill, which has
contributed to employing approximately
50,000 people in the Australasian region,
and one that will pay billions in various
forms of taxation while providing decades
of opportunities for many, is it really in
the best interests of Australians to burden
and delay such projects with thousands of
approvals, permits and licences?
In a little under three weeks, on
10 December, Roy Hill will its one-
year anniversary from rst shipment,
after a very aggressive construction
timetable. It is currently completing a
very aggressive ramp-up to achieve 55
million tonnes per annum early next
year, to become the largest single iron
ore mine in Australia.
It is telling that during this period,
there have been no other major mining
projects opened in Australia, and who
can honestly say Australia's lack of
encouragement to invest, its onerous
government tape and high taxation, with
threats from time to time of even higher
taxation, had nothing to do with that?
Despite mining companies usually
having mines in tough outback areas,
having to deal with poisonous snakes,
mosquitoes, ies, and battle the very
high temperatures, dust, drought,
res, oods and earthquakes, their
biggest challenge was complying with
The University of Sydney's Law
School recently reported that the
fastest-growing sector for new graduate
lawyers was 'in compliance services' -- in
other words, helping companies comply
with government regulation.
Now, that's something that should
alarm us all.
Red tape is not something that we
can't change; governments can act to
Other countries have done this with
great success, such as our neighbour
Singapore, and currently India.
As a country, we need to reassess our
priorities, and as an industry, we need
to work harder to make our case better
understood and heard, especially when
it comes to taxation.
Australia has the fourth-highest
10 • Australian Resources and Investment • VOLUME 11 NUMBER 1
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