3.3.16. Finite resources and intergenerational allocation Review intergenerational revenue allocations.
It is recommended that the Government reviews the process of the intergenerational allocation of the benefits from finite royalty revenues, with a particular focus on implementing a scheme that is modelled on the Norwegian sovereign wealth fund approach. Although Western Australia is currently blessed with abundant natural resources, there is a debt owed to previous generations who were custodians of the land and also to future generations who inherit the land. At the time of writing, all royalties are included in current yearly revenue totals and it could be argued that little is saved or invested. In addition, there has been an increase in unsustainable debt, an increase in government deficits and a growing government reliance on royalties from unsustainable finite resources (18% in 2017; 15% in 2016). The Norwegian Government’s approach to the equitable allocation of finite resource royalties across the generations is widely seen as world’s best practice. The aim is to incentivise secondary processing and therefore royalty holidays or royalty reductions for mining companies are unlikely to achieve this goal. The focus needs to be on incentivising high technology processing companies to locate processing facilities in WA. Based on interviews these companies are sensitive to operating costs like energy, logistics, chemicals, water, staff costs as well as supply security, not royalties. 3.3.17. State Government policy on electric vehicles State Government review phasing out petrol and diesel vehicles by 2030, especially in metro areas. Global Governments in nations and cities are regulating and incentivising to phase out petrol and especially diesel in favour of electric vehicles. This can be seen as a help to the environment but it also helps facilitate the New Energy transition. The WA power network is preparing for a significant increase in electric vehicle (EV) usage. The Government of Norway has incentivized EVs and seen 40% of new cars sold in Norway being EVs. Several European Governments are discussing banning petrol and diesel engines over the next fifteen years: The Netherlands by 2025, Paris by 2030 and even Germany is investigating phasing out petrol and diesel engines in favour of EV and gas around 2030. Eighty per cent of WA’s light vehicles could be accommodated on the network without significant investment and this would increase electricity usage (approximately 8-11%) and increase revenues to the State Government. Greater numbers of EVs for the local market would increase the demand for batteries and assist to underpin local battery production. Other benefits would be reduced pollution, improved fuel security, new industries and jobs, cheaper vehicle purchase and maintenance costs, health and safety benefits and reduced imports of foreign petroleum products. Most importantly the policy would provide a strong signal to the world that WA is taking seriously the New Energy economy and wants to play a big part in its development locally. 3.3.18. European Union Critical Raw Materials (CRM) WA initiate EU support over Lithium Valley through CRM status. As outlined above the EU Commission publishes a list of CRM that are important for the EU economy and may have supply risk concerns. In order to assist WA’s minerals being placed on this list it is recommended that the State Government assist in facilitating diversified supply of these critical materials with WA companies in return for investment, technology and secondary processing facilities. As part of a geostrategic agreement with the EU, e-waste from the EU could be reprocessed in WA as part of a long-term concession to justify WA investment. Thus this approach can be part of the branding and promotion of Lithium Valley to the EU and its companies that may be interested in investing here. Due to the emphasis on quality that is expressed through standards, environmental regulations and strong technical and transparent monitoring of products, the Lithium Valley brand can be something for WA to use as a major means of creating our future.
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