Media Release – Federal government needs to stop treating the mining industry as an ATM

22 May 2013

In a speech to the Australian Mines and Metals Association on Friday, ANDEV Chairman Mrs Gina Rinehart warned that the federal government must stop taking the mining industry for granted.

“Jobs and investment in the resources sector have begun to dry up as major companies look overseas where governments are welcoming mining companies with open arms,” said Dom Talimanidis, Director of the North Australia Project at the Institute of Public Affairs.

“The federal government fails to take into consideration the huge costs associated with exploration, conducting studies, and bringing in multi-billion dollar finance to get through the thousands of approvals and permits that restrict the industry at every turn. Instead, the industry is being used as an ATM for the government to pay off record debt levels,” Mr Talimanidis said.

The minerals in the ground belong to the States, not to the federal government. Once the States contract the rights to mining companies to extract and sell – in return for royalties and taxes – they belong to the companies that have made the substantial investment needed to extract them.

“All Australians have benefited from the mining boom, yet instead of prolonging investment the Gillard government continues to straddle the industry with costs and regulations which drive major companies overseas,” Mr Talimanidis said.

The industry already substantially contributes to the social and economic welfare of all Australians. Last year BHP Billiton alone paid over $9 billion to federal and state governments – around the same amount the federal government spent on tertiary education.

Figures released by the Reserve Bank of Australia earlier this year show that mining and related industries employ 1.126 million people in Australia. Spin-off industries, in services and mining technology, have grown to sales of $30 billion a year and exports of around $12 billion.

“If the government’s long term aim is to increase revenues, they need to create an environment which is conducive to further investment and exploration,” Mr Talimanidis said.

The Institute of Public Affairs, in conjunction with Australians for Northern Development and Economic Vision, is calling for the establishment of a Northern Special Economic Zone with lower taxes and a reduced regulatory burden.

The North Australia Project is a joint project of Australians for Northern Development and Economic Vision and the Institute of Public Affairs. For more information visit www.andev-project.org.

Media comment: Dom Talimanidis, Director ‐ North Australia Project, 0412 178 264, dtalimanidis@ipa.org.au