PERTH (miningweekly.com) – The Minerals Council of Australia (MCA) has welcomed statements by the federal Treasurer acknowledging the importance of the resources sector to Australia’s economy.

Speaking at a press conference in Canberra, ahead of the Budget which is some five weeks away, Treasurer Jim Chalmers, said that the Budget deficit for 2021/22 would show an improvement of nearly A$50-billion from what was previously expected, with A$28-billion of that driven by higher-than-expected revenues.

Chalmers said that higher commodity prices, for longer periods of time, had helped to boost the revenue, but he warned that some of these commodity prices had already begun to drop, including that of iron-ore and metallurgical coal.

“The mining industry welcomes comments by the Treasurer that the final budget outcome for 2021/22 has been significantly improved thanks to a boost in Australia’s mineral and energy commodity exports,” MCA CEO Tania Constable said on Wednesday.

“This fiscal dividend highlights that it is investment, not short-term tax grabs, that drive economic growth and prosperity. Investment creates new jobs, boosts productivity and supports a vibrant, innovative economy,” she added.

Constable noted that over A$300-billion had been invested in the mining industry since 2010 to grow output of commodities such as iron-ore, bauxite and gold.

As a result, mining is now the largest contributor to Australia’s economy, accounting for 10% of gross domestic product, the nation’s largest source of export income, with a new record high A$413-billion in resources exports last financial year, and supports over 1.1-million jobs at mine sites and in supply chains across the country.

“As [the] announcement from the Treasurer shows, the mining industry delivers benefits for all Australians via the tax and royalty revenue it pays to governments each year,” Constable said.

“In 2020/21, the mining industry paid A$43.2-billion in company taxes and royalties. With production remaining strong through 2021/22, Australia continued to benefit from high commodity prices with the industry being a key driver of the announced A$50-billion improvement in the federal budget deficit.

“While commodity prices are cyclical, Australia can continue to benefit from further growth in its mining industry if we get our policy settings right,” she added.

World resource demand is set to surge over the next 30 years as the world transitions to a net-zero economy, and Constable noted that the demand for commodities such as lithium, copper, nickel and rare earth elements would be essential to the technologies the world needed to drive lower emissions with recent estimates suggesting over A$4-trillion of investment in mining and minerals processing would be needed by 2050.

“To maximise its share of this investment Australia must ensure it has globally competitive tax rates, workplace flexibility and increased government funding for pre-competitive exploration programmes.

“A strong mining sector is paramount to help the government successfully embark on fiscal repair and reduce the debt burden on future generations,” she added.