The demand for Australia’s resources will continue, but better policies are needed to stay competitive in the global market. That was the message Minerals Council of Australia chief, Mitchell Hooke, delivered at the 2012 Kevin Mccann Lecture on Energy and Resources Law.
Speaking at the University of Sydney last night, Hooke remained adamant that the need for Australia’s resources will not diminish as emerging economies continued to surge in their plans of urbanisation and growth.
Pointing to China as the main example, Hooke explained that as more people moved out of poverty and into the middle class, at a rate of 170 people a minute, the demand for mineral would remain strong. Though Hooke did point to the recent price slumps in coking coal, he surmised that commodity prices had caught up with demand and sees this as the reason for the easing prices saying the resource race has moved from ‘price led growth to volume led growth.’
Hooke is calling for policy changes which will ensure Australia stays competitive in what he called the ‘global village,’ and pointed to the reforms made by emerging economies which put Australia at a disadvantage and at risk of losing out on market share.
“There is no salvation in dining out on our natural resources,” he said.
Hooke pointed to higher total cash costs, which are 30 per cent more than the global average as making Australia an unattractive place to do business for foreign investors.
He went on to say that Australia’s position as a premier global supplier is ‘deteriorating as emerging markets become more competitive.”
Pointing to places like Kazakhstan, India and South America, where costs are lower, Hooke says natural resource companies have no choice but to access future resources elsewhere.
Hooke says that restrictions need to be taken off the economy in order for sustained growth and that we need policy changes which "recharges the batteries of economic reform,” with a sustainable fiscal policy which will help to restore and maintain economic growth.
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