Tuesday’s Federal Budget recognised what we already know. Northern Australia’s resources are driving the nation’s economy.
Importantly, the budget also recognised that different regions have unique problems and solutions.
The budget allocated $4.3 billion exclusively for projects in regional Australia ranging from infrastructure projects to an extension of the skilled migration scheme. It seems the federal government has realised that regional Australia should be treated differently to the South-East population centres.
But the budget lacked vision for the future of the resource sector. ABARE currently estimates a total pipeline of mining investment of more than $380 billion over the next few years. (Here’s The Age report about it.) Imagine what this figure could be if the government had announced the establishment of a Special Economic Zone in Northern Australia.
For the most part the budget focused on taxing the mining sector. The initiatives aimed at supporting the ‘mining boom mark II’ unfortunately did not go far enough. I said this in a press release this morning. So did Adele Ferguson in Wednesday’s The Age. The Australian also said that the budget ‘would not do a great deal’ for the skills shortage crisis.
The government is reaping the benefits of the resource boom through its new taxes but in doing so is putting Australia’s competitive advantage at risk. Other resource rich nations are gearing up to compete against us. The government needs to support the resource industry so that Australia remains an attractive investment destination long past the budget returns to surplus in 2013.
I told you last week about the success of our seminars in Townsville, Charters Towers and Mackay. Thank you to those of you who came along. If you did, you will now also receive the IPA’s Hey … What did I miss?, our weekly email update. If you’d like to unsubscribe to either email update simply click the ‘unsubscribe’ link at the end of the email or feel free to send me an email.
As always please feel free to contact me with your thoughts and ideas for North Australia at jroskam@ipa.org.au.