- Cement Concrete & Aggregates Australia (CCAA) has warned that proposed new minerals and extractive-industry fee regulations in Victoria, set to commence 1 January 2027, will significantly increase quarry operating costs and the price of essential construction materials, impacting housing, infrastructure and renewable energy projects.
- CCAA Chief Executive Officer Michael Kilgariff criticised the Government for failing to publish the final fee schedule or explain how industry submissions were addressed, despite businesses facing what he described as a material increase in operating costs.
- The proposed fee uplift of 234 per cent far exceeds Melbourne's CPI increase of approximately 32 per cent since the previous review, and the regulatory cost allocation relies on outdated estimates from 2013 and 2014 rather than current activity-based costing.
- CCAA argues the timing is poor, as introducing new fees on 1 January 2027 — only six months before a new duty-based regulatory framework commences on 1 July 2027 — represents poor sequencing, and is calling for any increases to be deferred until the modernised system is in place.
- CCAA is urging the Government to publish the final fee schedule immediately, defer increases until July 2027, benchmark fees against other states, phase in any justified increases, and link future fees to enforceable service standards, warning that rising costs are already deterring investment in Victoria.
Cement Concrete & Aggregates Australia (CCAA) has warned that higher minerals and extractive-industry fees will increase the cost of essential construction materials, adding to housing, infrastructure and renewable energy project costs while further weakening Victoria’s competitiveness as a destination for investment.
A Special Government Gazette published on 14 August confirms that the Minister for Energy and Resources has decided to recommend new minerals and extractive-industry fee regulations, proposed to commence on 1 January 2027.
CCAA Australia Chief Executive Officer Michael Kilgariff said the Government should immediately publish the final fees and the basis on which they were calculated.
“This is a material increase in the cost of operating quarries and supplying the construction materials Victoria depends on, yet affected businesses have not been told what the final charges will be,” Mr Kilgariff said.
“Industry participated constructively in the consultation process. It should now be given the complete fee schedule, a clear account of how submissions were addressed and sufficient time to assess the impact.”
Mr Kilgariff said Victoria’s increasing cost base was already affecting decisions about where companies invested in new plant, equipment and production capacity.
“Capital is mobile. Continuing increases in energy, labour, transport, insurance, WorkCover, taxes and regulatory costs are making it harder to justify investment in Victoria.
“Adding another substantial government charge will push marginal expansion projects and investment towards jurisdictions with lower costs, faster approvals and more predictable regulatory settings.
“Over time, that means less local production capacity, fewer regional jobs, longer transport distances and higher construction costs.”
The Regulatory Impact Statement acknowledged that the allocation of regulatory costs relied on estimates of regulatory effort from 2013 and 2014 rather than current activity-based costing.
“CCAA supports fair and transparent cost recovery, but cost recovery must reflect the efficient and demonstrated cost of regulation—not simply a regulator’s revenue target,” Mr Kilgariff said.
“Before requiring industry to contribute millions of dollars more each year, the Government should demonstrate that Resources Victoria is operating efficiently and that businesses will receive faster, better and measurable service.”
CCAA’s submission noted that Melbourne CPI had increased by approximately 32 per cent since the previous fee review, compared with the proposed 234 per cent uplift. It recommended that any justified increase be phased in, benchmarked against comparable interstate charges and tied to improved approval performance.
CCAA is also urging the Government to defer any increase until the new duty-based regulatory framework commences on 1 July 2027.
The Government’s own RIS acknowledges that the new framework will remove the existing work-plan requirement and require a broader review of fees.
“Introducing a new fee regime on 1 January, only six months before the underlying regulatory system changes, is poor sequencing,” Mr Kilgariff said.
“The Government should complete the reforms, establish the efficient cost of the modernised system and then introduce fees that are proportionate, risk-based and supported by current evidence.”
Heavy construction materials represent an average of approximately 29 per cent of project costs. An average new home uses around 110 tonnes of aggregate and more than 50 cubic metres of concrete, while a wind turbine can require up to 1,000 cubic metres of concrete.
“Costs imposed at the quarry gate will flow through to homebuyers, infrastructure budgets, renewable energy developers and taxpayers,” Mr Kilgariff said.
“Victoria cannot improve housing affordability, deliver infrastructure efficiently or lower the cost of the energy transition while making essential construction materials more expensive.”
CCAA is calling on the Government to publish the final fee schedule immediately, defer increases until July 2027, use current activity-based costing, benchmark fees against other states, phase in any justified increases and link future fees to enforceable service standards.
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About CCAA
CCAA is the voice of Australia’s heavy construction materials industry, an industry that contributes $20.7 billion to GDP and supports 112,970 jobs nationwide. CCAA members produce most of Australia's cement, concrete and aggregates, which are essential to the nation’s building and construction sectors.
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Contact: Mitch Itter, Manager Communications | 0431 542 660 | [email protected]
