Productivity Commission report debunks mining sector subsidy accusations

The Productivity Commission’s Trade and Assistance Review 2017–18 has reported that the Australian mining industry is not subsidised, according to the Minerals Council of Australia (MCA).

It confirms the effective rate of combined assistance to mining in 2017–18 was only 0.2 per cent, the same low rate that has been maintained over the previous five years.

The report further states that the estimated effective rate of assistance from tariff and budgetary assistance for mining is “negligible.”

Seventy-four per cent of budgetary assistance attributed to mining consists of research and development tax offsets, which are “available to all industries,” MCA chief executive Tania Constable said.

“Further, mining incurred a net tariff penalty of $102 million in 2017–18, owing to tariffs imposed on imports used in Australian mining operations,” she added.

Productivity Commission chair Michael Brennan, however cautioned that protectionist sentiment is once again “on the rise around the world.”

The Productivity Commission said the world trading system is under greater strain than at any time since the 1930s and can no longer be taken for granted.

“Unfortunately, we are seeing the language of market gain give way to the language of strategic rivalry, resulting in unpredictable trade policy. This is bad for business and bad for jobs,” Brennan said.

“The single most important step Australia can take in the face of mounting troubles in the world trading system is to keep our own borders open to trade and investment.”

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