KALGOORLIE, Australia (Dow Jones)--Australia's largest mining forum has called for a change of government in the country, saying the shift would remove uncertainty hanging over Australia's resources industry.
In an opening speech to the Diggers & Dealers forum in the outback gold mining town of Kalgoorlie, the event's chairman Barry Eldridge said the country's precarious political situation, combined with the introduction of new taxes on mining and carbon emissions, has deterred investment.
"We have experimented with a 'hung parliament'. It has not worked and is causing long-term uncertainty for decision makers in Australia," he told the event. "If we are right [about the direction of policy] then Australia will elect an alternative government."
But Eldridge, a director of iron-ore miner Cliffs Natural Resources (CLF) and of West Africa-focused iron ore developer Sundance Resources Ltd. (SDL.AU), is skeptical an alternative government would overturn the mining tax.
"The Liberals continue to say that they will remove the resources tax if they are elected. This is positive but my cynicism suggests that there are not many existing taxes that get removed and there is always an excuse for retaining a revenue stream," he said.
Industry anger about a planned mining tax introduced by former prime minister Kevin Rudd contributed to the atmosphere of political turmoil that led to his removal by his own party last year. His successor, Julia Gillard, has watered down the tax but further angered the country's miners by introducing a carbon pricing scheme as part of a deal with the Greens party, which holds the balance of power in Australia's Senate.
However, Eldridge underlined that uncertainty was the biggest issue for the industry, and suggested they would be equally happy to see a firm majority for Gillard's Labor party as a win by the Liberal-National coalition, which is well ahead in most recent polls.
"If we don't have a government that can govern effectively and use the politics in appropriate circumstances then we should have an election and create certainty," Eldridge said. "We may not always agree with those decisions but at least we would know what rules we are operating under."
He said the uncertainty was creating a "cloud of fog" over the country's mining industry and wider economy.
Australia is enjoying a once-in-a-generation mining boom, with the Australian Bureau of Agricultural Research and Economics and Sciences reporting recently that investment in the resources sector had hit A$173.5 billion.
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