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Budget acknowledges importance of resources to Australian economy

Budget acknowledges importance of resources to Australian economy

Photo by Bloomberg

13th May 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Federal Treasurer Joe Hockey has given kudos to the resources industry for supporting the country’s economy, a move that has been welcomed by industry bodies across the country.

Announcing the federal Budget in Parliament on Tuesday evening, Hockey said that Australia’s iron-ore exports to China remained significant, while the country was poised to become the world’s largest exporter of liquefied natural gas (LNG) within the next five years.

“Together with our annual exports of coal, this is enough energy to power Tokyo, Singapore and Mumbai for an entire year,” Hockey said.

“And while prices are lower, and we wish they were higher, the opportunities from Asia for our resources are enormous.”

Hockey noted that during the past 12 months, the Australian economy had dealt with weaker-than-expected global demand, lower commodity prices and falling revenue, which contributed to a fall of some A$90-billion in expected tax revenue.

The Western Australian Chamber of Minerals and Energy (CME) said on Wednesday that it was pleased the Treasurer had acknowledged the valuable contribution made by the resources sector to the ongoing prosperity of Australia.

“The resources sector needs to remain internationally competitive if it is to continue to deliver benefits to the Australian community and to that end, we’re pleased the federal government has not placed additional cost burdens on our industry,” said CME CEO Reg Howard-Smith.

Hockey announced the establishment of a A$5-billion Northern Australia Infrastructure Facility, which he said was the first major step in Australia’s plan for the great North.

“We will partner with the private sector and governments of Western Australia, the Northern Territory and Queensland, to provide large concessional loans for the construction of ports, pipelines, electricity and water infrastructure that will open our Northern frontier for business.

“This commitment to nation building adds to the record A$50-billion in transport infrastructure we announced in last year’s Budget. Infrastructure that is now, as I speak, under construction,” Hockey said.

“Northern Australia, specifically the Pilbara and Kimberley regions are major drivers of economic growth and exports. Targeted infrastructure investments will deliver a tremendous return to the community over time,” Howard-Smith said.

The Queensland Resources Council also welcomed the infrastructure initiative, saying it would help to build essential new road, water, electricity, airport and rail infrastructure in regions in the north that have long been hamstrung by inadequate infrastructure.

The Association of Mining and Exploration Companies (Amec) also proved enthusiastic about the announcement, with Amec CEO Simon Bennison saying that it would create jobs and much-needed regional infrastructure, which would encourage investment in mineral exploration and mining projects in Australia’s North.

Bennison also welcomed the federal government’s commitment to continue with the proposed reduction in the company tax rate to 28.5% on July 1, saying it was a positive message to industry and should be extended to all businesses.

“This would further aid business and investment confidence,” he said.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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