Clayton Utz – Sponsors, Professor Geraldine Mackenzie, Ladies & Gentlemen
It is a pleasure to address this conference today. The minerals and energy industry is crucial to Australia’s prosperity and to our place in the world economy.
Australia is playing a major part in one of history’s greatest mining booms. Our miners are helping transform some of the world’s largest economies, bringing prosperity to Australia.
Mining now accounts for almost 50 per cent of Australian exports in value terms, and the recent growth in minerals exports has been staggering.
In 2009-2010, for example, the industry shipped exports worth almost A$165 billion, excluding petroleum and natural gas. This has increased from A$45.9 billion just a few years earlier in 2002-2003.
It is estimated that the industry directly employs 158,000 Australians, while indirectly sustaining a further 506,000 jobs in the broader economy.
At the same time, I am fully aware that the boom has raised complex issues about the role of mining in Australia, and we do understand how important issues such as the ‘two speed economy’ are for many in the community and for the broader national debate.
Today I would like to focus on some of the ways in which the Australian Government is helping to develop the industry and ensure its long term prosperity through sensible, balanced policies.
We are committed to helping mineral and energy projects succeed, both at home and abroad.
Industry profile and trade trends
The Australian continent holds vast natural resources. Most recent advice suggests Australia has the world’s largest economic reserves of brown coal, mineral sands, nickel, silver, uranium, zinc and lead.
Despite our comparatively small population, we are the world’s biggest producer of bauxite and alumina. We are the biggest exporter of gold, the second biggest producer of lead and the third biggest producer of iron ore, uranium and zinc.
Moreover, the appetite for all these resources keeps growing.
According to the Composition of Trade 2010 report, the value of Australia’s exports of iron ore and concentrates - our biggest single export category – increased by 64.3 per cent last year alone.
To meet this growing demand for our resources, Australia must maintain its sound economic management and pursue policies that remove bottlenecks and improve efficiency.
Our mineral wealth will not amount to much if we cannot continue to extract it efficiently or transport it to markets where it is needed—or indeed if we cannot access such markets because of trade barriers.
That is why the Government is implementing measures aimed at boosting our productivity and trade.
These measures include:
- Sound economic management and returning the Budget to surplus by 2012-2013.
- Placing a price on carbon pollution to help deal with climate change, and assist Australian industry to move to a clean energy future.
- Increasing support for education and training through Building Australia’s Future Workforce, a $3 billion package designed to maintain and expand our skilled workforce.
- Introducing a more efficient taxation regime for the mining sector via the Mineral Resource Rent Tax. The MRRT will ensure that the benefits of the boom reach the wider community and help make other tax changes possible, such as a reduction in company tax rate to 29 per cent.
- Developing a National Ports Strategy and National Freight Strategy to keep supply chains open.
- Assisting individual resource projects to secure the investment and infrastructure they need through the Industry Capability Network.
- Upholding free, fair and open international trade by working to finalise the Doha Round of the World Trade Organization, while pursuing non-discriminatory bilateral free trade agreements.
- Reforming Austrade, the Australian Trade Commission, to make it more responsive to the needs of exporters in key emerging and frontier markets with significant mining opportunities.
The Dynamic METS sector
These policies are helping sustain the mining boom in Australia. They are important for its long-term economic stability and to ensure it advances the prosperity for all Australians.
But I’d also like to mention how these policies help another sector which is allied to the extraction industries— the mining, equipment, technology and services sector or METS.
To export raw materials, you clearly need the expertise and technology to extract them — the skills and knowhow, by the way, at which Australian firms excel.
While the mining industry continues to generate wealth and jobs at home, the METS sector it relies on is exporting Australian technological expertise to the world.
Austrade conservatively estimates the METS sector contributes about A$10 billion to the Australian economy annually and $A3 billion in exports.
Opportunities exist to expand this trade, especially in the emerging markets of Africa, Latin America and Central Asia, but success will not come without overcoming some significant challenges.
As part of its recent review, Austrade is refocusing its efforts on emerging markets, redeploying resources and staff to assist enterprising Australian firms, such as those in the METS sector.
While Australia’s mining giants are already establishing major projects in these markets, Austrade has also identified numerous opportunities for the smaller METS firms.
Under its new strategy Austrade will be better placed to help them deal with some of the complex issues that can arise in regions such as sub-Saharan Africa.
Issues that include cultural sensitivities, language barriers and differences in the business environment overseas.
Austrade’s overseas-based mining specialists will also be able to help METS companies find joint venture partners and provide introductions to potential customers.
With their new strategic direction Austrade shows how this Government is willing to embrace reforms that make a huge difference.
In conclusion, let me say the future for Australia’s minerals and energy industry is bright. The Treasurer, for example, recently estimated that mining investment in Australia will reach $83 billion in 2011-12, up from $35 billion in 2009-10.
We stand on the cusp of an exciting era where unprecedented demand for our raw materials, skills and technology will underpin Australian prosperity for many years to come.
Our Government recognises the challenges of the current boom and we are actively working to make the most of the exciting opportunities ahead.
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