PERTH (miningweekly.com) – The Australian resources sector has welcomed the Productivity Commission’s Trade and Assistance Review for 2017/18, saying it exploded the myth that the resources industry was subsidised.
The Productivity Commission estimates that the effective rate of combined assistance to mining in 2017/18 was just 0.2%, which has been consistent over the past five years, with the commission saying that the “estimated effective rate of assistance from tariff and budgetary assistance for mining is negligible”.
Minerals Council of Australia CEO Tania Constable on Wednesday pointed out that 74% of budgetary assistance attributed to mining consists of research and development tax offsets, which are available to all industries.
“Further, mining incurred a net tariff penalty of A$102-million in 2017/18, owing to tariffs imposed on imports used in Australian mining operations,” she said.
The Productivity Commission has meanwhile warned against protectionism, saying that the global trading system was under greater strain than at any time since the 1930s.
“Protectionist sentiment is once again on the rise around the world. Unfortunately, we are seeing the language of market gain give way to the language of strategic rivalry, resulting in unpredictable trade policy. This is bad for business and bad for jobs,” Productivity Commission chairperson Michael Brennan said.
“The single most important step Australia can take in the face of mounting troubles in the world trading system is to keep our own borders open to trade and investment.”
Commissioner Jonathan Coppel said that the certainty of the rules-based trading system was of immense benefit to Australia and was a pillar of a strong global economy.
“It has helped to underpin 27 years of growth in Australia and to lift a billion people out of poverty around the world,” he said.
Coppel said that the importance of strengthening in an even-handed manner the rules-based system governing international trade could not be underestimated, and added that Australia should also continue to work with other countries to build consensus on how to resolve long-standing and escalating challenges facing the World Trade Organisation.
“We hurt the incomes of average Australians by imposing nuisance tariffs on the goods they buy, requiring complex 'rules of origin' in trade agreements, and running one of the world’s most active anti-dumping schemes. We only harm ourselves with these policies,” Brennan added.