Mining boosting national income - report
PERTH (miningweekly.com) – Research conducted by the Center for International Economics (CIE) on behalf of the Minerals Council of Australia (MCA) has found that the continued expansion of mining operations in Australia has delivered some A$14 800 to Australian households in 2020 in the form of increases in wages and household income.
The report notes that the share of mining in the economy has increased from under 5% some 15 years ago, to around 10% currently, and that direct employment in mining has increased from around 130 000 people 15 years ago to more than 240 000 currently.
Using a similar method to a landmark 2014 study by Reserve Bank economists, the CIE modelling compares the state of the Australian economy with and without the expansion of mining.
The CEI found that without the significant expansion of mining this century, Australia’s economic growth would have been 13% lower in 2020, real wages would have been 8% lower in 2020, or A$120 a week lower per worker, and that the average annual real wage growth between 1998 and 2020 would have been slower at 0.47% instead of 0.74%.
In addition, CIE modelled the effects of a 1% a year increase in labour productivity growth resulting from a modest reform programme, including a lower corporate tax rate, better regulatory settings for international investment, minor workplace relations improvements and implementation of an industry-focused skills programme.
CIE noted that implementing a modest productivity reform agenda would enrich households by A$11 673 by 2030, a benefit similar and additional to the benefits from the ongoing mining boom.
CIE’s analysis indicates that if this productivity reform agenda was implemented, real gross domestic product (GDP) per person would be A$9 900 higher, real wages growth from 2021 to 2030 would double to 1.7% a year, and real wages would be 9.4% higher by 2030, or A$130 a week higher per worker.
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