Gold Royalties Response Group
This campaign for WA gold producers, united under the banner of the Gold Royalty Response Group (GRRG), shows that groups which put forward a unified argument based on hard facts, tell the stories of real people and engage in person with politicians can influence public policy decisions and protect the sustainability of their industry.
In mid-2012 the State Government announced it had formed a committee to review the royalties paid on the various mineral commodities produced in WA. Public comments made by senior members of the Government indicated the gold sector was in the firing line for an increased royalty rate.
The sector was rightly alarmed. After enduring several hard years of low prices and high costs, many operators knew their business couldn’t sustain an increased royalty rate. Cannings Purple convinced gold producers they needed a stakeholder association to represent their interests and the GRRG was born. What followed was one of the most intense and sustained campaigns by an industry group to influence a government decision in WA’s history.
The threat to the gold sector became fully apparent in May 2013 when the WA Department of Treasury budgeted for an extra $180m of revenue from royalties in 2015-16. Treasury forecasts indicated a total of $560 million in royalty revenue would be collected over the budget forward estimates. The Government had not yet received the royalty review committee’s recommendations and yet Treasury was confidently budgeting on the review resulting in increased revenue from royalty rates.
Over the 10 months following the budget release, the GRRG mounted a sustained engagement campaign, working to educate WA MPs on the difficulties facing the marginal gold sector and the inaccuracies of the methodology used to guide royalty rate settings.
The group commissioned Deloitte Access Economics to analyse the impact of a rate rise on the WA gold industry, the local economy and employment. The Deloitte report confirmed the suspicions of many of GRRG members – gold operations across the state would be forced to dramatically downsize or shut if royalty rates increased. Now the GRRG had independent and authoritative analysis supporting their position.
The hard facts revealed in the report formed the basis for a campaign which used a mix of traditional
government and community engagement methods such as advertising in mainstream and digital media, targeted meetings, briefings and participation in political party fundraising events, along with the use of social media to communicate with and influence MPs.
As the campaign built momentum, GRRG members were encouraged by feedback from MPs from all political parties which indicated an increasing understanding of the royalty system and the critical issues confronting the industry. The GRRG built a large network of gold industry supporters amongst WA MPs as a result of its comprehensive engagement.
What the GRRG achieved
On 25 March 2015 the Barnett Government released the recommendations of the MRRA and at the same time ruled out an increase in the gold royalty rate in 2015-16. This decision was made despite the MRRA’s recommendations to increase the royalty rate applied to gold by 50 per cent and remove a royalty free threshold on the first 2,500 ounces produced.
The GRRG’s campaign achieved the following:
Stopped a 2015/16 gold royalty increase
Saved GRRG members many tens of millions of dollars in additional royalty payments in 2015/16
Created a prominent voice for WA’s gold industry
Created an integrated conventional and social media campaign seen more than 20 million times
Created a support network for the gold industry amongst WA MPs
Generated more than 490 media stories - exceeding $1.5million in editorial value
A rating in the top 10% most influential social media campaigns globally
Reached 80% of Perth’s population - changing public perception about the gold industry
The GRRG campaign demonstrates the power of mounting an effective, multi-pronged and sustained government engagement campaign. Organisations able to mount a strong and clear argument, build and maintain good relationships with MPs from all political persuasions and gather community support can influence the development of key areas of public policy and protect the sustainability of their industry.
While the decision provided welcome relief for the industry, GRRG members know the fight to maintain the royalty rate on gold at a level that enables the industry to survive and be sustainable is far from over.