Focus on: economic recovery
As the number of active coronavirus cases in Australia continues to decline, and states and territories progressively ease social distancing restrictions, focus is shifting to the post-pandemic economic recovery. Governments have started to announce fast-tracked funding for ‘shovel-ready’ projects to stimulate the economy and create jobs. To date, announcements have centred around infrastructure projects, however the mining states have indicated that there will be a focus on approving new mining projects and expansions more quickly.
Due to limited closures or cessation of activity, Australia’s mining sector has buttressed the economy during the COVID-19 crisis. Operating from a running start, the sector is now well-positioned to support the nation’s economic recovery. Expectations for Australia’s 2019-20 resources and energy export earnings were recently upgraded and are now forecast to reach a record $299 billion in the year to June 30. This is a result of strong prices for iron ore and gold, combined with a weaker Australian dollar and mine closures in other parts of the world. Governments can be expected to attempt to harness this momentum by publicly supporting mining infrastructure and exploration projects over coming months.
On infrastructure, Deputy Prime Minister and Minister for Infrastructure Michael McCormack wrote to state and territory counterparts in early March, asking them to identify further shovel-ready infrastructure projects. However, critics have argued that complicated federal and state planning and environmental regulations make it difficult to get projects off the ground quickly. As public scrutiny is applied to shovel-ready projects across the country, governments are likely to face criticism that project timeframes don’t line up with the rhetoric about post-pandemic stimulus and recovery.
This is not anticipated to be limited to infrastructure projects, and despite government support, the difficulty of expediting projects is expected to be felt in the mining industry. The system – heavy with checks and balances – is not designed for quick or expedited decision making.
There is some cause for optimism, however. For example, the NSW Government has introduced a Planning System Acceleration Program which is designed to fast-track assessments of State Significant Developments, development applications and rezoning. At a federal level, industry is advocating for reforms to the Environment Protection and Biodiversity Conservation Act – which is currently under review – to remove duplication across the federal and state levels and reduce delays in project approvals. Federal Environment Minister Sussan Ley has flagged changes to the Act, with the aim of preventing “unnecessary blockages getting in the way of key projects at the time of recovery”. An interim report is due in June, with legislation expected around October.
State governments have indicated they are willing to work with industry to identify blockages, and there are signs that governments are following through on commitments to address them. If governments move to make meaningful change to their various planning regimes and work with industry to identify activities that are duplicative, no longer fit for purpose or of low value, there may be significant cause for hope that shovel-ready projects could be just that.
Sandy Kay-Oswald is a Director – Public Affairs in GRACosway’s Adelaide office. He provides comprehensive policy and regulatory advice to clients, including across the resources sector.
Contact Sandy on +61 432 220 063 or Contact Us