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Budget affirms importance of resources sector

The Federal Budget has spotlighted developing Australia’s critical mineral industry, encouraging low-emissions technology and decarbonisation, and growing the country’s workforce of the future.

It also highlighted the significant contribution the mining and resources sector made to economies and communities around the country, with Treasurer Jim Chalmers reflecting on the positive impact of strong commodity prices and demand in his Budget speech.

Budget commitments included $15 billion for the National Reconstruction Fund to transform and strengthen industries, with up to $1b of that being allocated to a Value-Adding In Resources Fund.

The Government also addressed the labour shortage issues through training measures such as an additional 465,000 fee-free TAFE places, and also expanded permanent migration and committed more than $42 million to accelerate visa processing and reduce backlogs.

An allocation of $42.5m over four years was made to implement the Federal Government’s response to recommendations of the Respect@Work Report, and $1.7 billion over six years to support women’s safety.

Among the other significant announcements contained in the Budget, or unveiled in the lead-up to it, included:

  • $50.5m to establish an Australian Critical Minerals Research and Development Hub
  • $50m for a Critical Minerals Development Program, to fund competitive grants supporting early and mid-stage projects
  • The Pilbara being among three regions sharing in $672.7m over seven years from 2022–23 towards enabling infrastructure to support emerging industries and economic transition
  • $4.7b over four years from 2022–23 (and $1.7 billion per year ongoing) to deliver cheaper child care, easing the cost of living for families and reducing barriers to greater workforce participation
  • The Rewiring The Nation initiative, with $20b provided to rebuild and modernise the energy grid
  • $275.7m over four years from 2022–23 towards establishing a strong Department of Climate Change, Energy, the Environment and Water
  • Establishment of a $1.9b Powering the Regions Fund to help transform regional industries and help regional Australians access the economic opportunities of decarbonisation
  • $100m to the New Energy Apprenticeships and New Energy Skills programs
  • $105.2m to support First Nations people to respond to climate change in their communities
  • Grants of $113.6m for manufacturing upgrades to boost Australia’s competitiveness, invest in its regions and reduce carbon output
  • $5.8m over five years from 2022–23 to support women in science, technology, engineering and maths (STEM) through the Women in STEM and Entrepreneurship program and to undertake an independent review of existing STEM programs.

The Chamber of Minerals and Energy of WA chief executive Rebecca Tomkinson said the Budget confirmed the importance of the resources sector to the national economy.

“Our sector’s contributions help fund vital Federal Government investment in healthcare, childcare, education and infrastructure,” she said.

“CME and its member companies also welcome Budget measures aimed at boosting the Australian critical minerals industry and decarbonisation across a variety of industries.

“These measures are very much aligned with the work our sector is already undertaking to grow its ability to extract and refine forward-facing commodities, and to reduce emissions as we work towards net zero targets.”

As the skills shortage continues, large mining companies are hoping that foreign workers can help solve the problem.

Echoing the sentiment, Queensland Resources Council chief executive Ian Macfarlane said the Budget showed that continuing international demand for Queensland’s coal, gas and metals was the major contributor to Australia’s record terms of trade.

“For every three months commodity prices remain high, the resources sector is forecast to contribute an additional $43.8billion in GDP, and $10billion of tax revenue over the next two years, which is a staggering result that shows just how important mining is to our economic future,” he said.

“Resources and energy exports were the biggest contributor to a record 12 per cent increase in Australia’s terms of trade, underpinning our economic strength.

“It is good to see the Federal Government acknowledge the importance, and the contribution, of the resources sector to the nation’s economic security.

“It’s time the Queensland Government did the same by abandoning its ill-considered coal royalty tax increase, which is seriously jeopardising the long-term future of the resources sector and the 420,000-plus people whose jobs we support.”

The QRC also welcomed the Commonwealth’s focus on boosting skilled worker numbers by offering free TAFE places.

“Skilled worker shortage is a major issue for the Queensland resources sector and it’s vital the Commonwealth remains focused on the issue to ensure the industry can reach its full productivity and maximise jobs and economic opportunities for all Australians,” Macfarlane said.

The Minerals Council of Australia was also quick to point out the “extraordinary” contribution from mining.

It said that in the last 20 years, employment in mining has tripled and wages doubled, benefiting hundreds of thousands of Australians, especially in regional areas.

But MCA chief executive Tania Constable warned that the government’s plan to fundamentally realign Australia’s workplace relations system from enterprise bargaining to multi-employer bargaining will undermine efforts by both the government and the Reserve Bank to stabilise the economy.

“Multi-employer bargaining will expose mining to levels of industrial disruption and wage inflation not seen since the 1980s,” she said.

“It is clear from the economic outlook presented by the Treasurer in handing down the budget that the government must embark on the productivity reforms needed to secure the nation’s economic future, including attracting a large slice of the $4 trillion of mining investment required to transform the world to net-zero emissions by 2050.

“It is increased productivity that will drive business growth and with the right policies Australian mining can undergo another major expansion in investment.

“However, to fully capture the economic potential of this opportunity, government policies must support investment in exploration, mining, minerals processing and mining-related manufacturing.

“Measures such as the new programs for funding students at universities and in technical and further education, particularly those in regional Australia, are a good start, as are government initiatives on critical materials such as funding the new research and development hub and other development programs.”

Constable said the budget shows the value of the large expansion in mining investment that began in the early 2000s which has provided more than $143 billion in company taxes over the last decade.

Internationally competitive and stable investment settings are essential to attracting large-scale investment in mining that will ultimately benefit all businesses, workers, and households, and other economies around the world, she said.

 

Editor of industrial titles and mastheads with Prime Creative Media. Publications include Rail Express and Australian Mining (web content).
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