PERTH (miningweekly.com) – The Productivity Commission’s latest Trade and Assistance Review has shown that Australian mining had received the least assistance during 2019/20 of all industries.
The Australian industry received A$12.1-billion in government assistance during 2019/20, to help prevent job losses and maintain viable business during the Covid-19 pandemic.
Industry received some A$0.3-billion in net tariff assistance, a further A$5.1-billion in budgetary outlays, and A$6.7-billion in tax concessions.
The primary production industry received 20% of the government assistance, while accounting for 2% of the economic output, while the manufacturing sector received 29% of net assistance, while accounting for 6% of the economic output.
The services sector accounted for 47% of net assistance during 2019/20, accounting for 80% of economic output, while mining received only 4% net assistance, while accounting for 11% of economic output.
The Minerals Council of Australia (MCA) this week said that the review estimates that the effective rate of assistance for mining, the ratio of total assistance to output, was just 0.2% in 2019/20, the same low rate as the last five years.
The report shows that in 2019/20, Australian mining incurred a net tariff penalty of A$53-million.
“The Commission points out that given that Australia’s mining industries are export-orientated price takers, this has an adverse impact on the competitiveness of Australia’s mining exports,” said MCA CEO Tania Constable.
“The Commission also notes that budgetary assistance to mining has fallen by 18% since 2014/15.”
She pointed out that 65% of budgetary assistance attributed to mining consists of research and development (R&D) tax incentive offsets, which are available to all industries.
The Commission confirmed that while foreign direct investment (FDI) in mining had declined in recent years, the industry still accounted for more than one-third, or 35.1%, of all FDI in Australia.
The Commission’s decision to monitor FDI in future reviews will improve understanding of changes in investment patterns, including the impact of major changes to Australia’s foreign investment policy settings implemented this year.
“Policy settings that help make Australia a competitive destination for investment are vital to the Australian mining sector and jobs and regional communities mining supports.
“Mining is Australia’s largest industry, generating A$271-billion in export revenue in 2020, directly providing 256 000 highly skilled, highly paid and secure jobs, and paying A$39.3-billion in taxes and royalties in 2019/20 alone,” Constable said.