Last week’s National Accounts delivered two stark revelations for Australians: firstly, government spending is unmistakably on the rise, and secondly, it is our country’s resources sector that foots the bill.
Much like the age-old fable of the goose that laid the golden egg, Australia’s mining industry has, for decades, been nourishing the nation’s economy with its golden bounty.
Yet, just as in Aesop’s tale, there lies a danger in neglecting the very source of our prosperity. Right now, we risk not just the golden egg but the goose itself.
Amid the global economic headwinds and domestic policy potholes that had to be navigated in the final quarter of 2023, it was the export of iron ore, coal and gold that stopped our economy from drifting backwards.
The numbers speak for themselves: iron ore exports surged by 12 per cent, contributing an additional $13.5bn to the economy, while coal exports grew by 5 per cent, adding another $8.2bn over the quarter.
In Queensland alone, over the last year the mining sector added $70bn to the economy. Let us not forget this translates directly into jobs, with Queensland mining companies employing more than 70,000 full-time workers across the state.
That’s a lot of income, company and other direct and indirect taxes keeping Australia solvent.
When you add to that some $18bn paid in royalties, the Queensland mining industry’s contribution to the public purse is nothing short of monumental.
Revenue generated from the mining industry is not merely a figure on a balance sheet; it represents families supported, communities built, and essential services funded.
Without it, our governments would cease to be going concerns, and Australia would no longer enjoy one of the highest standards of living in the world.
Mining’s contribution ensures Australians have access to quality healthcare, education, and infrastructure – the pillars of a strong and vibrant society. Nor could we afford the significant increases in defence spending we are told our strategic circumstances require.
Too many in Canberra seem to be embarrassed that our nation depends so thoroughly on our natural resources bounty. Despite underwriting our nation’s prosperity, living standards and security, the path forward for this industry that contributes so much remains uncertain.
Our tax system is increasingly uncompetitive globally, and our regulatory environment is becoming more cumbersome, made worse by open lawfare by well-funded anti-development activists. This trinity of deterrents is slowing the inflow of foreign capital and domestic investment – both crucial for the continued success of our mining sector.
Yet as government expenditure escalates, a robust mining sector becomes ever more critical if we want to sustain public spending, advance Australia’s broader economic agenda and keep the budget in the black.
Recently there has been a concerning trend in Canberra political circles to refer to our traditional commodities merely as “things we export”. This oversimplification not only undermines the significant value these resources contribute to our economy, but it also underestimates how easily these investment dollars could move to developing nations who, through necessity, do not have the luxury of treating their natural resources with embarrassment and contempt.
This perspective is dangerously blinkered, ignoring both the risks and hard work that underpin our sector. It is akin to the shortsighted farmer in Aesop’s fable, who, not content with his regular supply of golden eggs, slaughtered the goose hoping to find a treasure trove inside, only to end up with nothing.
We cannot afford to make the same mistake by undercutting the sector with unsupportive policies and onerous tax burdens that could cripple its capacity to deliver the golden eggs – revenue and jobs upon which so much depends.
The mining sector’s investment landscape is marred by environmental approval uncertainties, escalating energy costs, and damaging changes to our industrial relations policies.
The prolonged timelines for project development, exacerbated by potential legislative changes and legal battles, highlight the urgent need for policy reform. Australia’s mining sector has long been a global leader, a status that should not be put at risk by a narrow focus on politically favoured commodities.
Our strategy should encompass both the encouragement of emerging mineral markets and the reinforcement of traditional mining commodities. By addressing the regulatory, energy, and labour challenges facing the sector, Australia can sustain its mining legacy and continue to build upon its economic foundations, ensuring prosperity for future generations.
The mining sector is our economic golden goose, and it is up to us to nurture its health for current and future generations of Australians. It’s time to set the stage for a healthy mining sector, primed to continue laying its golden eggs long into the future.
