Australian wages and households have been significantly bolstered by a strong mining-backed economy, according to analysis by the Centre for International Economics (CIE).
Australia’s mining industry has grown substantially since the mining boom began in 2005, which formed the analysis’ base level to compare against current-day results.
“The share of mining in the economy has increased from under five per cent 15 years ago to 10 per cent currently,” the CIE report stated.
“Direct employment in mining has increased from approximately 130,000 people 15 years ago to more than 240,000.”
The analysis, commissioned by the Minerals Council of Australia (MCA), compared the actual Australian economy against simulated scenarios of where it would have been without the expansion of mining.
MCA chief executive officer Tania Constable said the growth of the Australian economy was made possible by determined investment in the mining industry.
“Strong mining production and exports – made possible by unprecedented investments – have delivered substantial increases in wages and household income to all Australians over the past decade,” Constable said.
The analysis found that Australian GDP per person was $9735 better off in 2020, compared to an economy without the expansion of mining this century.
Additionally, household consumption was almost $15,000 better off in 2020, compared with the same base-level scenarios.
The results of the CIE report encouraged further investment in the industry, as Australia continues to play a large part in the production and export of critical minerals.
“Australia’s economic history indicates that ongoing productivity growth – progressively doing more with the same resources and innovating to find new ways of doing things – is the major driver of economic welfare per person,” the report stated.
To stimulate this growth, the report suggested ongoing industry reform would be key.
“A persistent yet modest productivity reform agenda – including a lower corporate tax rate for all businesses, better regulatory settings for international investment, incremental improvements to industrial relations rules, and implementation of an industry-focused skills program – could easily lead to a one per cent a year improvement in labour productivity,” the CIE stated.
Constable summarised the CIE’s analysis, as it looked to the future of Australia’s economic growth.
“CIE also estimates that implementing a modest productivity reform agenda would enrich households by $11,673 by 2030 – a benefit similar and additional to the benefits from the ongoing mining boom,” Constable said.