The Federal Government’s decision to expand capital gains tax protections for start-ups while excluding junior mineral explorers has been labelled ‘beyond disappointing’ by Association of Mining and Exploration Companies chief executive officer Warren Pearce.

AMEC believes this is another blow to an industry already struggling to attract the high-risk capital needed to fund greenfields exploration.

“The CGT changes shows the government is out of touch with markets and how the real-world finances mineral exploration and discovery,” Mr Pearce said.

CGT reforms announced in the May Budget replace the existing 50 per cent CGT discount for individuals, trusts and partnerships with cost-base indexation and a 30 per cent minimum tax on gains accruing from July 1, 2027.

Treasurer Jim Chalmers today released draft legislation with details on the planned Innovative Business CGT Concession for the start-up sector.

Minerals Council of Australia chief executive officer Tania Constable said investment in eligible early‑stage exploration was similar to investment in venture capital and start-ups, so should get comparable CGT treatment.

The government’s changes to capital gains tax for junior minerals exploration companies would adversely impact their ability to raise funds from individual investors for crucial greenfields mineral exploration in Australia, she said.

MCA analysis found the changes would see investors in junior exploration companies have their return on investment after receiving capital gains reduced by 19 per cent, Ms Constable said.

“The government claims that no government in Australia’s history has done more to support the resources sector,” she said.

“Yet on top of axing the Junior Minerals Exploration Incentive, it has now added to the tax burden on junior minerals explorers who face the same or greater risk than the innovative startups recognised in the latest changes to the new CGT rules.

“Without junior explorers there are no new mines, no future royalties, no future exports and no future critical minerals projects.”

The Federal Government has opened another round of consultation on the legislation. But AMEC said that further consultation would be meaningless unless it resulted in genuine change.