WHERE WILL THE GOVERNMENT TAKE US IN 2012?

RON KERR, Honorary CEO CMPA reports on the demise of sand and stone.

WITH the enactment of the Extractive Industry Act – 1966 some older participants in the industry saw it as the end of the free world. Others moved forward and took the new direction in their stride. It resulted in the industry workforce, the local community and the environment being better protected and a clear direction that ensured the State’s extractive industry resources were identified and made accessible to those who were interested in carving a life out of this sector. It also resulted in Victoria’s quarries and their managers being recognized as some of the most skilled and efficient throughout Australia.

The regulation of our Industry has changed in the past 12 years, with the original objectives gradually eroded and/or picked up by other authorities. It has reached a point where our Act no longer exists in its own right. As a result, there is no clear purpose or objective in the protection or identification of stone and sand resources in this state.

The CMPA believes there is a lack of stewardship by Government of the State’s extractive resources. There is no doubt this will put in jeopardy future sustainable extraction of the resource for the benefit of the community and the economy of Victoria. Both local councils and private business owners are being directly affected by this lack of direction from Government on a daily basis.

Businesses in the Melbourne metropolitan area have been unable to source raw materials to meet daily demand. Local councils in regional Victoria report that the delivery costs of materials are becoming greater than the cost of the material itself! There is also a range of quarry materials now being carted in excess of 150kms to their market.

To date this practice has not been reflected in the prices being set for the material and all the overhead costs including rising transport costs, but it is obvious that this cannot continue as returns continue to diminish. The honeymoon for our customers must come to an end. Previous estimations of price rises of 30% – as nominated in the CMPA’s An Unsustainable Future of 2009 – may be seen as extremely conservative in hindsight.

Presently there appears to be no specific obligation on any Government department to ensure future generations will have security of resource. This lack of clear obligation hinders the delivery of effective outcomes for the industry.

There are no apparent obligations on any State Department administering regulation over the industry to ensure that future generations will have security of resources and this is not assisting in delivering effective outcomes. There is also no recognition of the value of the resource to the State which exacerbates the deteriorating investment in exploration and capital resourcing in our Industry.

Paradoxically grasses and trees have a financial value to the State and off sets of significant value are being required before investment into projects can be undertaken, in our Industry and any other land use project for that matter.

For small to medium enterprises, the lack of commitment to protecting resources for future generations – commensurate with the continual expansion of regulatory burdens and costs – is ensuring that industry investment is unattractive if not, clearly restricted.

It is well recognized by those working in our Industry – and those being served by it – that the extractive industry is vital to the growth and well being of the Victorian economy. This must be recognized by the current Government in the revision of its policy objectives during 2012.

To address these issues the extractive industry sector should be incorporated under the scope of the Planning Act to better recognize and protect the State’s limited sand and stone resources for future generations. This is needed to:

• Ensure Victoria remains a vibrant and healthy economy with assured access to extractive resources industries situated as close to their market and the major transport routes as practicable;
• Ensure Victorian businesses using extractive resources are able to access choice of supply; and
• Address the current deterioration of Victoria’s extractive industry resources that have suffered due to a lack of protection over recent times, historically high levels of demand and urban growth pressure.

While there are regular reviews of legislation with financial impact statements being prepared, there is little evidence that this is followed with any viable and practicable outcomes. If this was not accurate, industry participants would not be faced with, for example, a $300,000 bill for a Cultural Heritage Management Plan, or a bill to pay $100,000 per habitat hectare for native vegetation off sets, or to have a financial burden placed upon an operator’s business only to find the off set value for time-stamping of high category land in excess of $270,000 per hectare, extensive time (up to 7 years) to gain approval for Work Authority. Small to medium businesses do not have the financial resources, nor time, to run their businesses this way.

Our industry was identified 46 years ago as requiring its own dedicated legislative framework to protect the natural resource while facilitating effective business operations. That legislation proved its worth by providing clear direction resulting in dynamic growth. Sand and stone resources are not an infinite resource and their demise as a cornerstone of the construction industry seems inevitable if Government does not arrest the implications of unwarranted and restrictive regulation.

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