The term “nation building” is one that has been bandied around our political landscape quite a lot over the past few years. With the resources sector moving rapidly from the boom years of approval and development, to one of maintenance and supply to existing markets, the industry has predictably shed thousands of jobs. This has stirred both state and federal governments into action, as they look for ways to stimulate growth and create new jobs.
Does Government Regulation Increase Operating Costs?
This usually means that new projects will gain favour, new ideas will be offered, and all of this activity will no doubt create some form of government regulation or reform. For companies like the Reay Services Group, this activity may mean access to new opportunities, but we also realise that it could also mean additional operating costs.
We know from past experience that government regulations are often necessary to minimise risk to the environment or the safety of employees. However, it almost always falls to the business operators in the industry to fund the implementation of such regulations in one way or another.
Is “Red Tape” Crippling Resources Companies?
We are not suggesting that there should be no regulations at all, but business has long been critical of the amount of “red tape” involved in getting these so-called nation building projects up and running. Successive governments have promised to review and remove any unnecessary restrictions and reform outdated laws that impact on present day decisions. Little has been achieved and business is still bearing the financial impacts.
Policy Reforms Coming Slowly
An excellent example of a current issue is the reforms proposed to the tenure framework in Queensland, which is incompatible with the now globalised resources sector. This sector is regulated by 6 Acts dealing separately with different aspects of mining and energy exploration and production. Reforms are in the policy development stage, and are still to be introduced into Queensland Parliament.
Will the New Reforms Benefit Business?
Industry feedback has described the current regulations as “prescriptive, complex, duplicative and unresponsive”. The new approach is designed to get better economic use out of our resources, stimulate the economy, provide uniformity of resource tenures, better environmental outcomes and incentives to attract investment.
These are lofty goals, but the wheels of government turn slowly, and it remains to be seen if there will be any benefit to businesses like ours. Will the global resources market have changed dramatically by the time these new initiatives are in place? We will have to wait and see.
There are other legislative reforms currently being acted upon that will affect our industry. If just one of them became law and reduced our operating costs, we would have a much more optimistic view of the government reforms process.