Address to the 2017 Minerals Week Seminar

Ladies and Gentlemen, as the Chair of the Minerals Council of Australia (MCA) it is my pleasure to welcome you to Minerals Week 2017 and, in particular, to this Industry Seminar today.

I want to add my thanks to Aunty Matilda for her characteristically informative, entertaining and moving Welcome to Country.

And I acknowledge the traditional owners of the land on which we meet, the Ngunnawal people, and pay my respects to their elders, past and present.

Ladies and gentlemen, today’s program reflects the broader theme for Minerals Week 2017 – Australia’s comparative advantage.

This is not just a tip to the 200th anniversary of the publication of David Ricardo’s 1817 work, On the Principles of Political Economy and Taxation, which first articulated the concept of comparative advantage.

It is because our natural mineral wealth – combined with our talented workforce, innovative culture and pioneering spirit – is the basis of our comparative advantage. 

In Australia we are good at mining – in fact, we are world leaders.  And Australians enjoy better living standards because we are good at mining.

Others also depend on us being good at mining.

Take Japan.  Coal provides about one-third of Japan’s electricity needs.  And Australia provides about two-thirds of Japan’s coal needs. 

So one day of every week of the year Japanese industry and households rely on Australia’s coal for their electricity.   

Similarly, China relies on Australia for 60 per cent of its iron ore. 

Iron ore that has been integral to building the China of today and underpinning its exceptional economic growth.

That’s a lot of trust to place in one supplier.

If we were not such a reliable provider of minerals and energy, many people in our region would not enjoy the energy security and lifestyle they have today.

Today more than ever before, Australia takes its place as an energy and resources superpower.

In the year to 30 June, our resources export earnings hit a new record - $200 billion.

And that’s with commodity prices at less than peak levels.

That is testament to the unrelenting pursuit of productivity gains by our industry, especially through innovation.

But we plainly are not making the most of our natural strengths – our comparative advantage.

We are an energy superpower yet we have some of the highest energy costs in the world.

Our high quality coal is the world’s best and it remains the lowest cost, most reliable energy source available – that can meet our low emissions targets through high-efficiency, low-emissions technology.

That’s why it is being used in hundreds of the most advanced power stations in the world.

Our minerals are what make renewable energy systems possible –solar PV cells, wind turbines and new battery technology are all dependent on minerals that our industry produces.

We also account for about one-third of the world’s uranium reserves but stand out as the only one of the world’s top 20 economies that does not have nuclear power – one of the cleanest forms of electricity available today.

If we truly want to embrace a clean energy future, we should remove that ban and allow nuclear energy to be considered on its merits. 

Ladies and gentlemen, although Australia is a world leading minerals and energy producer, we must continue to expand our resource base.

Despite the welcome increase in 2016-17 exploration expenditure, exploration activity in Australia remains at historically low levels – having declined 70 per cent over the past five years.

A vibrant exploration sector is critical to ensuring we continue to deliver better living standards for all Australians in the future.

Accordingly, I would like to commend the Turnbull Government for its initiative in establishing the Junior Mineral Exploration Tax Credit (JMETC) which will encourage greenfield exploration to help ensure a future pipeline of resource projects in Australia. 

Our industry has consistently advocated for a tax measure to overcome the tax asymmetry whereby junior explorers with no taxable income are not able to access the immediate deduction for exploration.

I would like to also particularly commend the work of our sister organisation, AMEC and its outgoing CEO Simon Bennison for such consistent and determined advocacy for such a measure over many years. 

There is no doubt that, despite the difficult nature of the Parliament, the operating environment for the sector has improved in the last four years.

In particular, free trade agreements have been reached with three North Asian countries that account for $125 billion in Australia’s resources exports.

The China free trade agreement alone eliminated $600 million in transaction costs from our minerals trade to China.

Our international reputation as a reliable and trusted trading partner in these agreements is underpinned by our mineral exports over many decades.

But there is still more to do on the policy front for Australia to maintain its comparative advantage.

Ladies and gentlemen, our company tax rate has been frozen for nearly two decades while our competitors lower theirs.

Our approvals are taking longer even though there is no commensurate dividend in environmental outcomes.

The workplace reforms of the Hawke, Keating and Howard Governments have been wound back.

Our method of distributing GST revenue rewards those States that block resources exploration and development and punishes those that promote it.

And large parts of the Australian community simply do not understand the contribution we make to both our domestic economy and the quality of life we all enjoy.   The bottom line is that we must tell our story. We must shape our own destiny and continue to drive for that comparative advantage which sets us apart as a world leading mining industry.

We have never been afraid to do that – and Australia will be a better place for it.

Ladies and gentlemen, I am delighted to introduce our keynote speaker.

Barnaby Joyce, Deputy Prime Minister, is also the Minister for Agriculture and Water Resources and Minister for Resources and Northern Australia,   He has been Leader of the Nationals and Deputy Prime Minister since February 2016, having first been elected to Parliament in July 2005.

Ladies and Gentlemen, will you join me in welcoming Deputy Prime Minister Barnaby Joyce to Minerals Week 2017.

ENDS

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