ONE WAY TRAFFIC – Councils say Quarries should pay

A recent government inquiry into greenfields mineral exploration and project development in Victoria has been given the following comments by the Municipal Association of Victoria (MAV). TOM MCKENNY, Industri Communications reports.

LOCAL councils have taken a free hit at the extractive industry with calls for local road user charges and compensation for any impacts on neighbouring property values.

The Baillieu government’s broad ranging inquiry into greenfield mineral exploration and project development has heard a submission from the Municipal Association of Victoria (MAV) questioning the extractive industries contribution to local communities and suggesting councils be able to tax quarries directly.

The MAV, which represents local government around the state, suggested it should be able to tax or rate quarries directly to recover costs to fix damaged infrastructure as well as recommending extension of the Mineral Resources Act to allow neighbouring business or industry to seek compensation for being near a quarry.

Presenting what it referred to as a “reasonably simple submission”, the MAV said councils should be able to recover costs from the extractive industry to “deal with damage to roads and local infrastructure” caused by road transport.

MAV CEO Rob Spence said “one of the issues we face with extractive industries and mining are that these are not rateable entities; so when the community has to deal with damage to roads and local infrastructure by significant industries, very little of the benefit comes in locally.” The MAV said all they see is the deterioration of infrastructure and have a “lack of capacity to deal with it.”

The MAV suggested the state government support them or that they be allowed to “take a revenue stream or recover cost out of the industry to pay for road damage or bridge upgrades.”

Mr Spence said state government needed to think outside of the space the extractive industry occupied and consider the impacts it has on local roads “until it hits the state road network.”

Labor party MP, Wade Noonan, asked if there was evidence of road and infrastructure damage, or disputes and how they had been resolved if they had.

Mr Spence was unable to provide any examples suggesting that trying to assess damage by a particular industry compared to “general community” use was “quite problematic. We have had a go over a number of years to find a solution to this without ever coming up with a satisfactory solution.”

“You are looking at the capacity of bridges to carry loads and the capacity of the roads to take the loads. We are seeing it in grain movement now, with b-doubles on local roads with a massive amount of damage occurring,” Mr Spence said.

“At least they are paying rates. As you increase the load on what are generally local and not very significantly constructed roads and bridges, then you do a lot of damage and those things should be considered at the front end of any development, not at the back end of it.”

The MAV recommended quarries should compensate those affected by having a quarry nearby through an amendment to the MR(SD) Act.

Mr Spence said that stemmed from “affected” people and businesses not having the capacity to get any compensation. “It is brought forward by our members looking for an opportunity to see if there is a possibility to establish a basis for compensation,” he said.

“I know it is a difficult thing to do and I know in a lot of these industries you are dealing with pretty marginal development. That is why I think we have not got a lot of extractive industries and so on in Victoria – not a lot of mineral development.”

ROLE IN PERMIT PROCESS

The timing of council involvement in the permit process was another area identified by the MAV as of interest. The MAV also believed councils needed more support in addressing complex application, and addressed the issue of development encroaching on buffer zones. The MAV believes the sooner they are involved in the application process the “greater the opportunity to get sensible outcomes.”

“Th e councils are a good representation of community views. They understand the sensitivities in an area and are able to provide advice and guidance in the licensing process and in the work plan exercise,” according to Rob Spence.

INDEPENDENT ASSESSMENT AGENCY

The MAV suggested there be an independent agency available to councils to assist in assessing planning permits for extractive industries if they didn’t want to address them directly. They would like to see statutory consultative mechanisms in place for councils to be able to deal with applications.

Mr Spence likened the process to that of wind farms. “The concerns we hear from councils are about the fact that they are not included in the process when the minister ultimately has the capacity to call the thing in they want to be part of that process but [councils have] different choices or views about how they deal with it.”

Liberal committee representative Inga Peulich said the planning process was already drawn out and convoluted and needing streamlining and said she had been critical of local government when they had misjudged consultation as a way of getting a particular outcome. She told the MAV, “you already have control of tips and landfill and let me tell you in my neck of the woods that is not being handled particularly well.”

Mr Spence also suggested councils would benefit from expert support in difficult applications. “In the case of wind farms, the technical competence in the councils, particularly in rural councils, is not strong in dealing with wind farms or, for example, mining activities or extractive industries.” Mr Spence said technical support would allow councils to “properly consider what is before them.”

The MAV was also concerned with encroachment into buffer zones by development which impacted on the capacity of the industry to operate. “We think there needs to be some protection of the buffer zone to ensure that the industry can complete its work program”.

MEMBER COMMENTS

Comments from Andrew Burdett, Managing Director of Burdett Sand & Soil Pty Ltd “It would appear to me that the quarry industry is already contributing substantially towards the costs of maintaining and development of infrastructure. The following table confirms the amounts already paid towards taxes that are used for the infrastructure imposts of Australia.”

Legend

A truck and trailer will normally travel 1.6kms on 1 litre of fuel.

A truck and trailer will carry an average 25 tonnes of material on a normal trip.

The average trip for delivery on an out and return basis is 60kms, thus utilising 37.5 litres of fuel.

Current Government Fuel Excise is 0.38143 cents per litre.

Formula

60kms @ 1.6 = 37.5 litres of fuel
37.5 litres @ 0.38143 = $14.30 excise paid
25 tonnes @ $14.30 = 0.57cents/tonne paid in fuel excise

Based on 2010/11 where 50 million tonnes of material were quarried.

That’s a total of $28.5 million in excise tax alone that was paid to
the federal government coffers for that period.

Owners of each truck and trailer pay annual registration fees totaling from $11,121 to $19,635 for a B Double combination to the state government coffers.

COMMENTS FROM THE CMPA

The above submission by the MAV will result in real concern by all business across Victoria not just those involved in the Extractive Industries. To suggest that quarries should be taxed or rated directly by a Municipality to fix damaged infrastructure would set up a very dangerous precedence.

The commercial vehicles used by the Extractive Industries are not the only vehicles using local roads. Farmers, property developers, manufacturing industries, local landowners, even Municipalities themselves all have commercial vehicles using these roads.

Also it should be noted that the commercial trucks used by the extractive industries are paying high fuel tax and very high registration fees which we are told are for maintenance and improvements to infrastructure.

Municipalities are involved in the planning of any variation to an existing or development of a new quarry site right up front at the stage when all stakeholders are advised that a company or individual wants to develop a site. The agency with the lead role in quarry development is the DPI and they plus all the other government departments involved with an application for a quarry site development, should be more than adequate to support Municipalities with planning permit issues without the need for another independent agency as suggested by the MAV, thus adding more Bureaucracy to our currently overregulated industry.

Extractive Industries provide products that our modern society cannot do without. We need to ensure that they continue to provide products as cheap and as readily available as possible but with all the necessary environmental and planning requirements in place. To single out the Extractive Industries to pay additional taxes because they use a road or bridge is ridiculous.

For a full copy of the MAV submission and transcript go to: www.parliament.vic.gov.au/edic

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