People have options. Investors have options. Capital is mobile; workers are less mobile. The people who will suffer from this are workers, because their ability to move offshore is far more limited than those who own capital. That is what we will see—people moving offshore rather than staying here and paying elevated capital gains tax. That is the reality.
I want to talk about an industry I am passionate about: the mining industry. For 12 years before coming into this place, I worked as general counsel of a mid‑tier copper‑gold company. That company built two mines in Laos, lifting thousands of people out of poverty, and did so to the highest standards of health and safety, environmental compliance, and social licence.
That company began as an exploration company in Australia, listed on the ASX, supported by thousands of retail investors. Those investors put their capital into exploration on the basis that, if successful—if a discovery led to commercialisation—they would realise a capital gain. That is why they invested, and that story is repeated across Australia.
The Association of Mining and Exploration Companies (AMEC), in its opening statement to the Senate Economics Legislation Committee, underlined the importance of the tax regime to the future of mining exploration. Mineral exploration and mining make a critical contribution to Australia’s economy, directly employing over 314,000 people. Exploration is Australia’s original start‑up industry. It drives discoveries that lead to new mines, jobs and economic growth.
Its success relies on two things: first, individuals willing to invest their own time and money to develop projects; and second, mum‑and‑dad retail investors prepared to take a risk. Around one in 1,000 exploration projects becomes an operating mine. Investors understand that risk—they invest on the basis that their project might be one of the few that succeeds.
Despite that low success rate, small ASX‑listed exploration companies are responsible for around 75 per cent of Australia’s economic discoveries. That is extraordinary.
What the Labor government is doing through changes to capital gains tax is creating a significant disincentive for these companies to raise capital in Australia. As someone who has worked at a senior level in the industry, I know how these decisions are made around boardroom tables. These companies do not have to be listed on the ASX. They can list in Singapore, where there is zero capital gains tax, or in Canada, where favourable settings still apply.
This policy risks driving investment offshore—and with it, the wealth and jobs that flow from it. One of the strengths of Australia’s capital markets has been the willingness of everyday Australians to invest in high‑risk exploration ventures. That is a comparative advantage, and these changes put it at risk.
AMEC makes the point clearly: the incentive for investment is the prospect of capital growth. If that incentive is weakened, investors will walk away. Exploration companies will be starved of capital. That means fewer discoveries, fewer mines, fewer jobs and less government revenue.
This is a massive own goal for the mining industry and the broader economy. The recent deal struck with the Greens only compounds this concern. The International Energy Agency has said that the world needs dozens of new mines—lithium, nickel, cobalt—to meet emissions targets. Policies that discourage exploration will directly undermine Australia’s ability to contribute to—and benefit from—that demand.
As AMEC has said, this is a “kick in the guts” for the exploration sector and its investors.
When I entered this place, one of my goals was to advocate for policies that make it easier—not harder—for people to start businesses, create wealth and generate opportunity. I have seen firsthand how investment in exploration can transform communities and drive growth, both here and abroad.
Policies that discourage that investment risk undermining Australia’s future prosperity.
