The Minerals Council of Australia says the federal budget has again highlighted the importance of the resources sector to the nation’s economy and has called for structural reforms to secure long-term prosperity, including the proposed cut to the company tax rate.
The 2018-19 federal budget, handed down by treasurer Scott Morrison on Tuesday night, forecasts a growth in mining exports of 4% in FY18, and 6.5% in FY19, along with a 3.5% growth in the mining industry’s capital expenditure in FY20.
MCA interim chief executive David Byers said the figures show Australia is still heavily reliant on strong resource export growth, and a significant contribution by the mining sector to rising government tax receipts.
Byers says the $100 billion a year in company tax payments by FY22 also demonstrated the fundamentally important role played by mining and the wider business sector in funding the budget.
“Rising company tax collections, together with growth in individual tax payments, underpin the improvement in the Budget balance over the forward estimates,” he said.
“While this cyclical upswing has provided a welcome short-term boost – and enabled income tax relief – the government should pursue structural reforms to deliver long-term improvements to the Budget position and the economy’s growth potential.”
Byers said investments in infrastructure – including in national science and research infrastructure –are important new measures that will contribute to economic growth.
“The government should also use the Budget as the impetus for fresh economic reforms to drive the investment and growth needed to deliver jobs and prosperity into the future,” he continued.
“Only a genuine reform program, which boosts investment and workplace productivity, can deliver the strong and lasting growth required for serious budget repair.
“These reforms should include a comprehensive deregulation and competition policy agenda, a more flexible and productive workplace relations system and streamlined major project assessment processes.
“Parliament must also pass the Enterprise Tax Plan to improve the international competitiveness of Australia’s corporate tax rate and encourage business investment.”