Share of oil and gas , ONLY want 25%Share of oil/gas earnings ‘should come to regions’ Wednesday, April 02, 2014 • Kristine Walsh IF oil and gas explorers make a strike in Gisborne, a portion of their earnings should come back to the region, says Mayor Meng Foon. The Mayor has come out in support of Local Government New Zealand, which is pushing for mining royalties to be shared for the benefit of local communities. But rather than looking at royalties as a potential source of general local body funding, Mr Foon has his eyes fixed firmly on the region’s roads. Council infrastructure is not geared up to take the extra pressures the mining industry would bring, he says. “Our rural roads are just not made for heavy trucks. Just as the logging industry is having a huge impact on our rural roads, for the mining industry to be successful it would also need roads upgraded, bridges upgraded and water tables improved. “All this would take millions of dollars out of a community that simply cannot sustain the cost of heavy vehicles.” The amount Gisborne District Council draws from fuel and road taxes is not enough to maintain the roads for existing forestry industry, let alone expanded mining operations, says Mr Foon. He supports a New Zealand First policy that would deliver 25 percent of royalties directly to regional funds. NZ First leader Winston Peters says the policy announced last week is about fairness . . . “the region that generates wealth should share in it”. “We estimate more than $80 million would have gone towards regional development initiatives in 2012-13 if the royalties share was already in place,” Mr Peters says. “With our policy, the involvement of local people in decision-making and development would also help concerned residents and mineral extractors reach agreement over environmental issues.” In the six years to 2012, the Government was paid a total of $1.9 billion in levies and royalties — $380 million in 2012 alone — and by far the bulk of that was from oil and, to a lesser extent, gas. Income received from petroleum royalties contributes to the Government’s general revenue stream and that is something Local Government New Zealand would like to see changed. “Currently, royalties are paid to a consolidated central government fund, which does not flow through to communities,” says LGNZ president Lawrence Yule, who is mayor of Hastings — another area in the sights of petroleum companies. “Sharing royalties would ensure local people and economies benefit directly from petroleum and minerals extraction in their region. “Importantly, royalties sharing would provide local authorities with funding towards the additional infrastructure costs they face to support the presence of extraction industries.” LGNZ says it wants to see royalties- sharing “implemented as soon as possible to strengthen regional economic development for the benefit of communities”. • Neither Minister of Economic Development Steven Joyce or Labour leader David Cunliffe responded to requests to clarify their parties’ positions. Royalties could cover extra costs TAG Oil will next week start work on site establishment works for its proposed Waitangi Valley-1 exploratory well at Whatatutu, about 50 kilometres northwest of Gisborne. In the six years to 2012, the Government was paid a total of $1.9 billion in mining levies and royalties — $380 million in 2012 alone. By far the bulk of it was from oil and, to a lesser degree, gas. New Zealand First has announced a policy that would deliver 25 percent of royalties directly to regional development funds. Local Government NZ supports the policy, saying that sharing royalties would bring benefits to local economies as well as supporting councils in meeting additional infrastructure costs.