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Australian govt assistance to mining industry ‘negligible’ – report

24th June 2015

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

  

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JOHANNESBURG (miningweekly.com) – While manufacturing remains the biggest beneficiary of assistance from the Australian government through budgetary outlays, tax concessions and tariffs, other sectors, including mining, are doing far less well from the taxpayer.

The Productivity Commission’s latest Trade and Assistance review, released on Wednesday, shows that the mining industry received about A$285.7-million in net assistance.

The estimated net assistance across all sectors was $9.7-billion in 2013/14 – a 14% year-on-year increase of A$1.2-billion in nominal terms, with the manufacturing industry receiving the highest level of assistance of A$7.3-billion.

The Productivity Commission stated that the effective rate of assistance – the net assistance per unit of value added – for the mining industry was negligible. The industry’s effective rate of assistance had fallen from 0.2% to 0.1% over the last year. This compared with the estimated effective rate of assistance of 4.3% for the manufacturing industry, for instance.

The report stated that mining and primary production industries received little tariff assistance on outputs. The mining industry, together with all of the service industries, incurred negative net tariff assistance in 2013/14.

Commenting on the release of the report, Minerals Council of Australia CEO Brendan Pearson said that the findings were consistent with the message successive Australian governments had reiterated: that the country did not maintain fossil fuel subsidies. He also said that the findings provided a comprehensive rebuttal of the proposition, routinely peddled by anti-mining groups and the Greens Party, that the mining industry benefited from public subsidies.

The Chamber of Minerals and Energy of Western Australia (CME) has welcomed the findings of the report.

“Not content with dismissing the valuable economic contribution made by industry, anti-resources activists routinely mislead the community on the level of government assistance and subsidies available to the resources sector,” said CME CEO Reg Howard-Smith.

“Today’s report should end the debate on this issue, but these activists have never let facts or evidence interfere with their campaign rhetoric,” he added.

The CME stated that the resources sector continued to be a substantial contributor to state royalties and commonwealth taxes and remained a key contributor to state and national economies.

The 2015/16 Western Australian Budget released last month highlighted the economic importance of the resources sector, with more than 14% of the state government’s revenue coming from mining royalties alone.

“A strong and prosperous resources sector delivers enormous benefits to the community. It’s an industry all Western Australians should be proud of,” said Howard-Smith.

Edited by Creamer Media Reporter

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