Mining Tenements

In reply to Mr PATTERSON (Morphett) (27 August 2024).

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries): I have been advised:

1. South Australia is the only state that distributes rental to freehold landowners. This is a legacy issue where amounts the department receives from lease and licence holders, as part of their annual fees, are distributed to freehold landowners in addition to the compensation received from the lease or licence holder.

This amendment seeks to bring South Australia into alignment with other states, where the payments made to landowners are solely made by the lease or licence holder through their negotiated compensation agreements, and licence fee revenue paid to the regulator is retained by the regulator.

The amendments will progressively reduce the department's role as a middle person facilitating payments between landowners and lease or licence holders. Instead, the parties will utilise the provisions in the Mining Act and Mining Regulations to appropriately negotiate and facilitate compensation.

2. In June, all landowners known to the department associated with active leases and licences were notified of the proposed changes both by email and post. To maximise awareness of the proposed changes, the notification was sent to all landowners, whether they were currently eligible for distributions or not.

The Landowner Information Service was briefed about the changes and provided with the notification, to enable the service to support both existing landowners impacted by mining, and landowners who may in the future be impacted by mining.

Departmental officers met with the Concrete Cement and Aggregates Australia to discuss the scope of the changes.

The department's website has been updated with information about the proposed changes, including a copy of the notification issued to landowners. The website provides examples of how the proposed changes would apply in practice.

Relevant application forms, including notice of entry forms, have been updated to reference the proposed changes.

Of the very limited feedback received:

there were remarks that the amounts of money involved were not large relative to other factors;

some landowners were unaware of the entitlement to rental distributions to begin with, given the stage of mining operations on their land; and

there was a concern that the approach may increase costs to mining operators through higher compensation arrangements.

Upon passage of the bill, the department intends to communicate the changes to lease and licence holders through their industry bodies.

3. Where there is a transfer on or after 1 July 2026 that is not with a familial relationship, the amounts not distributed, that is the 50 per cent reduction, will be retained by government.

4. The rental amounts which are not distributed to freehold landowners are recognised as 'fees and charges' revenue for the department. This is consistent with the approach for rental amounts which do not relate to freehold land, or where the landowner is not eligible for a distribution, for example where the freehold landowner is a related body corporate of the lease or licence holder.

5. Yes, that is correct. Where a familial relationship exists for a transfer of freehold land which occurs on or after 1 July 2026, the new freehold landowner will be exempt from the 50 per cent reduction.