Government’s value on mining “clearly too low”

Mining and mining related businesses account for 20 per cent of Australia's economy and contribute much more than most people think, according to a Minerals Council of Australia report.

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Mining and mining related businesses account for 20 per cent of Australia’s economy and contribute much more than most people think, according to a Minerals Council of Australia report.

The new paper says modeling by the Treasury and Reserve Bank of Australia to show mining’s contribution to the economy had not used the correct methodology.

It said RBA and Government estimates were "clearly too low" and excluded numbers from investment in mining services.

"Mining servies output is growing rapidly at 15 to 20 per cent a year and Treasury estimates that on the back of the mining investment boom it will expand from 6.7 per cent of the economy in 2010-11 to 9.4 per cent in 2012-13."

"Yet some commentators continue to think of the mining sector as relatively small."

The paper said the mining sector and mining services sector were expected to grow by 5 and 20 per cent respectively, while non-mining sectors were growing at only 1 per cent.

It also said while a rise in the mining sector was associated with a contraction in manufacturing and other industries, growth in mining-geared manufacturing sectors was strong.

It said many firms in struggling industries were doing better by "tapping into the mining boom".

Earlier this week left-leaning think tank The Australia Institute said the mining industry only benefitted the very small amount of people working in the industry.

"While we have all heard stories about truck driving jobs earning big dollars, the reality for the 99 per cent of Queenslanders who don’t work in the mining industry is high housing costs, higher mortgage interest rates and fewer jobs in tourism, manufacturing and agriculture," it said.

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