Mining investment drives economic growth
Friday, September 23rd, 2022
The Minerals Council of Australia has welcomed comments by Federal Treasurer Jim Chalmers that the final budget outcome for 2021-22 has been significantly improved thanks to a boost in Australia’s mineral and energy commodity exports.
MCA chief executive Tania Constable said this fiscal dividend highlighted that it is investment, not short-term tax grabs, that drive economic growth and prosperity.
“Investment creates new jobs, boosts productivity and supports a vibrant, innovative economy,” she said.
“Over $300 billion has been invested in the mining industry since 2010 to grow output of commodities such as iron ore, bauxite and gold.
“As a result, mining is now the largest contributor to Australia’s economy (accounting for 10 per cent of GDP), our largest source of export income (with a new record high $413 billion in resources exports last financial year) and supports over 1.1 million jobs at mine sites and in supply chains across the country.
“As the announcement from the Treasurer shows, the mining industry delivers benefits for all Australians via the tax and royalty revenue it pays to governments each year.
“In 2020-21, the mining industry paid $43.2 billion in company taxes and royalties. With production remaining strong through 2021-22, Australia continued to benefit from high commodity prices with the industry being a key driver of the announced $50 billion improvement in the federal budget deficit.”
Constable said that while commodity prices are cyclical, Australia can continue to benefit from further growth in its mining industry if the policy settings were right.
World resource demand is set to surge over the next 30 years as the world transitions to a net-zero economy.
Demand for commodities such as lithium, copper, nickel and rare earth elements will be essential to the technologies the world needs to drive lower emissions with recent estimates suggesting over $4 trillion of investment in mining and minerals processing will be needed by 2050.
“To maximise its share of this investment Australia must ensure it has globally competitive tax rates, workplace flexibility and increased government funding for pre-competitive exploration programs,” Constable said.
“A strong mining sector is paramount to help the government successfully embark on fiscal repair and reduce the debt burden on future generations.”