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Minerals sector expects govt to 'refire engines' of economic reform

By: Mitchell Hooke, CEO, Minerals Council of Australia
10 September, 2013

The minerals industry looks forward to the Coalition government refiring the engines of economic reform in Australia.

The industry strongly supports the new government's agenda to boost Australia's productivity and competitiveness.

Abolishing the carbon tax and Minerals Resource Rent Tax (MRRT) will be a positive first step in an industry where our international competitors face no such comparable imposts.

The carbon tax has been a dead-weight on the economy that has failed to achieve its environmental objective while adding massive new costs on the minerals sector. The industry will engage actively with the Coalition's white paper process in the further development and implementation of the Direct Action climate change policy.

The MRRT was founded on the falsehood that the mining industry was not paying a fair share of tax and that a further new tax was necessary for Australians to share in the benefits of the Millennium mining boom. Both assertions were wrong in 2010 and they remain so today.

The minerals industry has paid an average effective tax rate in excess of 40 per cent over the past decade, even before the introduction of the MRRT and the carbon tax. Repeal of the MRRT will make a material difference to industry confidence. It will also send a powerful signal that Australia is not about to relinquish its position as a premier destination for investment and a cost-competitive global supplier of minerals resources.

The minerals industry strongly supports the Coalition's plan to streamline environmental approvals through a "one stop shop". The industry is committed to working with government Ministers to immediately develop the proposal further consistent with the government's and industry's mutual objectives of reducing unnecessary regulation and costs without compromising high environmental standards.

There is scope for significant change to the Fair Work Act to boost Australia's productivity and cost competitiveness. The current industrial laws have increased the power of trade unions and tribunals at the expense of direct relationships between employers and employees in the workplace. Limits imposed on choice and flexibility have increased project costs and undercut the industry's capacity to sustain and create more high-wage jobs.

The minerals industry will be a very keen participant in the new government's proposed Productivity Commission review of the Fair Work Act. Equally, the industry is greatly encouraged by the new government's commitment to immediately implement its election policies in key areas of union right of entry, greenfields project agreements and restoration of the Australian Building and Construction Commission.

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Check your facts | Wednesday, September 11, 2013, 11:50 AM
No, market forces have increased project costs. Mining companies decided to capitalise on high prices and chuck billions of dollars at all their projects all at once in a bid to capitalise. Surprise, surprise, this sparked a "bidding war" for labour, forcing wages up. in addition, many of the projects were in more marginal and remote areas, which incurred greater costs than mines closer to populated areas or with more accessible deposits. Nevertheless, it's worth noting that Australia was rated the best place in the world for mining investment for the 4th year running by leading US mining consultancy Behre Dolbear. Industry claims about the Fair Work Act also do not stand up to scrutiny. Workhours lost to dispute are down (they actually rose under Work Choices)and labour productivity continues to rise. It is the drag on capital prpoductivity which is pulling down multifactor productivity.
Rob | Friday, September 13, 2013, 10:32 AM
Agreed, 'check your facts'. Furthermore, the "average effective tax rate in excess of 40%" is not correct, as it includes royalties paid to the States. Royalties are a cost of raw materials which all of us SMEs pay every day. It is not a tax. Royalties for these ores are also probably a damn sight less than they should be, considering there is virtually no value-adding done in Australia. Maybe we should be charging variable rate royalties depending on whether there is value-adding done here (eg; bauxite shipped or bauxite to aluminium)