Resources sector boosts federal budget spending spree

mining cash

The Australian Government’s 2021-22 Budget has been fuelled by stronger commodity prices, which have enabled increased investment in the sector.

Budget documents have pointed to recent strength in commodity prices, especially iron ore, as important factors in the country’s improved terms of trade and growing GDP (gross domestic product into the next few years.

Chamber of Minerals and Energy (CME) of Western Australia chief executive Paul Everingham said the strength of commodity prices and the overall sector can be thanked for the country’s strong economic position on a global scale.

“I continue to be very proud of the way our sector has been able to keep operating safely and effectively through COVID-19 and the positive impact this has had on both the WA and Australian economies,” Everingham said.

“Federally, corporate taxes paid by CME member companies and the flow-on of some of the royalties paid to the WA government have helped fund vital support mechanisms such as JobKeeper and JobSeeker, and made a significant contribution to the country’s comparatively healthy economic position and outlook.”

The mining industry exceeded government expectations in its tax receipts, accounting for 30 per cent of company tax collections, which is forecast to reach $100.5 billion by 2024-25.

Deloitte Access Economics stated that the industry paid $39.9 billion in company tax and royalties in 2019-20, and $238.8 billion in the 10 years to 2019-20.

On top of this contribution, the resources sector represented a majority of the nation’s exports, said Deputy Prime Minister Michael McCormack in his budget overview statement.

“Australia’s resources sector continues to generate wealth for all Australians. Comprising over half of Australia’s total exports, the (Department of Industry, Science, Energy and Resources) works to ensure that Australia’s resources sector can operate in attractive, predictable, and efficient business conditions,” McCormack said.

With such wealth coming thanks to the resources sector, the government has announced a major bankroll of investments back into the sector.

This includes Geoscience Australia’s $225 million Exploring for the Future program, providing the pre-competitive information for the next major mineral discoveries in Australia and bringing total investment in the program to $225 million

The Queensland Resources Council chief executive Ian Macfarlane said the budget had done a good job in supporting the most important parts of the resources sector.

“The resources sector is the nation’s economic engine room and, as this budget demonstrates, has kept producing, earning and employing throughout the COVID-19 pandemic which has benefited all Australians,” Mcfarlane said.

“While we’re fortunate global demand for commodities such as coal and gas is increasing, we’re also at a critical time in Australia’s history where emissions targets need to be met, so we welcome the pragmatic initiatives in this budget to help make this transition possible.”

Asia Pacific at Project Management Institute Ben Breen said that mining industry investments were vitally important to the development of Australia, or any country for that matter.

“What pleases me most is the government’s investment in non‑university higher education providers with the aim of adding an additional 5,000 Commonwealth supported short course places this year. The future of Australia relies on upskilling today’s youth for the range of jobs that they will undertake in the future,”  Breen said.

Minerals Council of Australia chief executive officer Tania Constable said the investment in deserving Australians to thrive in a post-COVID-19 economy was admirable in the latest budget.

“Increased government support for apprentices, mental health, Indigenous girls academies, STEM scholarships for women, more affordable childcare and women’s safety will enhance and complement the mining industry’s efforts to secure a skilled and diverse workforce, as well as inclusive and respectful workplaces,” she said.

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