Value and benefits to New Zealand
The mineral and petroleum industries are an important part of New Zealand’s economy.
Our reserves of oil, gas, and minerals are valuable national assets offering unique opportunities for economic growth and securing our supply of affordable energy.
The petroleum and minerals industries:
- create highly skilled and well paid jobs. The average salary in the petroleum and minerals sector is $105,000 - twice the New Zealand average of $50,000;
- are among the longest lived industries in the country. They invest in local infrastructure, support local suppliers, offer training opportunities, and many invest in community initiatives;
- are innovative and technology focussed; and
- help to diversify regional economies – especially areas that rely heavily on agriculture, dairy, forestry or fishing – making them less vulnerable to external economic factors.
Each year oil, gas and minerals together contribute billions of dollars to New Zealand’s GDP and earns the Government hundreds of millions of dollars in royalties.
In addition, there is considerable revenue to the Government through personal and company taxation and GST from petroleum and mining activity.
The royalty regime comprises a mixture of:
- set rates for every unit (i.e. tonne) produced – typically used for lower value minerals such as aggregates and limestone; and
- a royalty paid on the percentage of sales or company profit, whichever is higher – typically used for higher value resources such as petroleum, gold, silver and coal (for example, petroleum operators normally have to pay either five per cent of sales or 20 per cent of profits – whichever is higher).
All opencast coal miners, and some gas producers, are also subject to an Energy Resources Levy based on a specified price per unit of production.
This money goes into the National Consolidation Fund, which benefits all New Zealanders through investment in broader infrastructure resources, such as hospitals, roads, schools and broadband.
For example, petroleum operators typically provide a significant amount of any profits to the Government through royalties and taxes.