Media Release: ADIA Presents Industry Submission to Senate Economics Legislation Committee

15 June, 2026

The Australian Drilling Industry Association (ADIA) has submitted a response to the Senate Economics Legislation Committee regarding the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and related income tax reforms. ADIA’s submission focuses on the proposed changes to Capital Gains Tax (CGT) arrangements for businesses, arguing that the reforms could have serious unintended consequences for both the drilling industry and the broader Australian economy.

ADIA contends that removing existing CGT concessions would significantly reduce investment in junior mineral exploration companies. Exploration relies heavily on private capital, often years before any commercial return is possible. Reduced investor incentives could make it much harder for explorers to raise funds, leading to fewer drilling programs and a substantial downturn in exploration activity. Given that exploration drilling accounts for around 45% of Australia’s drilling fleet, ADIA warns that the reforms could trigger a recession across large sections of the drilling industry.

The submission also argues that the proposed tax changes would undermine incentives for entrepreneurship. Drill contracting businesses are high-risk, capital-intensive ventures requiring substantial upfront investment with no guarantee of success. ADIA maintains that current taxation settings help balance the risks business owners undertake. Removing these incentives may discourage new business formation and prompt existing operators to leave the industry, reducing competition, innovation and productivity. The association notes broader evidence that business ownership in Australia is already declining.

ADIA further argues that Australia is at a critical moment economically and strategically. Global demand for critical minerals, rare earths, energy resources and infrastructure presents significant opportunities, but these opportunities depend on a strong and growing drilling sector. The association believes higher business taxation will reduce investment confidence, productivity growth and employment prospects, while weakening Australia’s competitiveness against countries such as Canada, Chile and Brazil.

ADIA therefore calls on the government to abandon the proposed business taxation changes and retain existing arrangements, while instead pursuing policies that encourage investment, productivity and long-term economic growth.

View the full release here.