17 December 2013
Releasing his mid-year budget update at the National Press Club, the Treasurer lamented the soft growth outlook for the Australian economy, which is forecast to remain at a below-trend 2.5 per cent for at least two years.
“Ongoing cost-cutting in some parts of the resources sector is feeding into lower investment intentions,” Mr Hockey said.
“From 2014 until 2016 the fall in mining investment could detract up to 2 per cent from economic growth.
“It is therefore crucial that we do everything we can to facilitate new mining investments such as the Roy Hill iron ore project in the Pilbara and gas projects across the country.
“Moreover, it is essential that we get rid of the carbon and mining taxes which are impediments to new mining investment.”
Mr Hockey said the government had already approved $180 billion in new mining investment, and was making progress in creating a one-stop-shop to replace the “tortuous” regulatory process currently faced by businesses.
The budget update predicts employment growth will remain “subdued” as a result of low mining investment, with unemployment rising to 6.5 per cent.
Mr Hockey said: “It is frustrating, but hopefully temporary, that the slower transition to the non-resources sector is flowing through to softer job creation and wages growth.
“Both are weaker this year than previously expected, and both are well below-trend.
“The silver lining is that slow wages growth is one of the mechanisms through which job creation will be supported as the economy transitions.”
Courtesy of the Australian