SENATOR DEAN SMITH
SHADOW ASSISTANT MINISTER TO THE SHADOW TREASURER
SHADOW ASSISTANT MINISTER FOR THE COST OF LIVING
LIBERAL SENATOR FOR WESTERN AUSTRALIA
28 May 2026
LABOR’S CGT CHANGES THREATEN WA EXPLORATION, JOBS AND FUTURE MINES
Labor’s proposed capital gains tax changes risk choking off investment into Western Australia’s mineral exploration sector, threatening jobs, discoveries and the next generation of mines that underpin the State’s economy.
Western Australia would be hit hardest, accounting for more than 60 per cent of Australia’s mineral exploration activity and hosting the overwhelming majority of the nation’s exploration companies in West Perth.
Mineral exploration, Australia’s original start-up sector, represents a $2.57 billion annual investment in Western Australia, supports more than 4,000 jobs and underpins the future of the State’s $220 billion resources industry.
Junior explorers are high-risk, pre-revenue businesses, with only around one in 1,000 projects progressing to production.
Without stable earnings, dividend streams or institutional backing, exploration companies rely on retail investors, self-managed super funds and “mum and dad” shareholders willing to back speculative, long-term opportunities.
Recent ASX exploration IPOs have depended heavily on retail investors, who account for more than half of early-stage allocations on average.
Reducing the after-tax return for those investors risks starving exploration of capital, weakening the pipeline from discovery to production and ultimately hitting jobs, royalties and government revenue.
No exploration investment means no exploration, no discoveries, no new mines, no critical minerals and no credible “Future Made in Australia”.
The Albanese Government has already scrapped the Junior Minerals Exploration Incentive (JMEI), despite the program generating hundreds of millions of dollars in additional exploration activity and strong long-term economic returns.
A University of Western Australia study found mineral exploration generates between seven and twenty dollars in economic value for every dollar invested.
With the Treasurer signalling potential carve-outs for parts of the technology sector, pressure is growing for mineral exploration to receive similar treatment given the disproportionate impact these changes would have on early-stage explorers.
Comments attributed to Senator Dean Smith:
“Over 60 per cent of Australia’s mineral exploration occurs in Western Australia and the overwhelming majority of these companies are based in West Perth, making this policy an attack on WA.”
“Mineral exploration is Australia’s original start-up sector, and if you cut off capital you cut off discoveries, future mines, critical minerals and future jobs.”
“Exploration companies do not have stable earnings, dividend streams or deep institutional backing; they survive because Australians are prepared to back high-risk opportunities with the prospect of long-term reward.”
“Labor has already scrapped the Junior Minerals Exploration Incentive and now wants to reduce the incentive for investors to back the next discovery, which is a dangerous combination.”
“A University of Western Australia study found mineral exploration delivers between seven and twenty dollars in economic value for every dollar invested, making it economically reckless to cut off investment before projects get off the ground.”
“The next iron ore mine, lithium project, rare earth discovery or critical minerals operation starts with exploration capital and investors willing to take a risk.”