VICTORIA'S treasurer has defended a proposed mining royalty, saying it is "preposterous" the state lacks one.
It came amid a backlash from the Australian Minerals Council, which said the industry had not been consulted about a measure to raise $56 million through a 2.75 per cent gold royalty.
Two mines in the region - one operated by Kirkland Lake Gold in Fosterville and the other by Mandalay Resources at Costerfield - could see their bottom lines impacted, Australian Minerals Council of Australia's James Sorahan said.
"Mandalay is already paying a royalty on the antimony it produces. So it's another cost that they have to manage for operating in Victoria," he said.
Mr Sorahan was concerned about the "tax grab".
"Tax is very complex. Tax regimes for resources need to be carefully designed to make sure they are fit for purpose and raise revenue in a way that does not impact jobs and investment," Mr Sorahan said.
Victoria's sector had surged in recent years, thanks in part to the success of mines in the region. Kirkland Lake Gold recently revised estimates of how much gold was under Fosterville to $5 billion.
Treasurer Tim Pallas defended the budget decision for Victoria to become the last state to bring in a gold royalty.
"When I came across this ... I could not believe the state did not have a royalty for gold - that is, we didn't actually try to extract some value of the asset that is ultimately in the ownership of the people of Victoria," he said on Tuesday.
He noted comments from company Navarre Minerals' managing director that the royalty was "no big deal" and industry veteran Hugh Morgan said it was "sensible".
The comments came as regional councils and the Bendigo and Adelaide Bank welcomed budget plans to reduce regional payroll tax to a quarter of the metropolitan rate by 2022-23.
"We are encouraged by and supportive of initiatives that enhance the viability, growth and investment opportunities for small businesses in regional Victoria," the bank's Joe Formichella said.
Regional Cities Victoria chair Margaret O'Rourke said it would be the lowest rate in the nation.
"It does have an impact for people when they are thinking of moving sites. Maybe they are getting overcrowded in Melbourne.
"And reducing the payroll tax will certainly encourage regional businesses to hire more staff."
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