Address to the Minerals Week Parliamentary Dinner
Address by Andrew Michelmore
Chairman, Minerals Council of Australia and Chief Executive MMG Ltd
to the 2015 Minerals Council of Australia Parliamentary Dinner
The Prime Minister, Parliamentarians, Distinguished guests, Ladies and Gentlemen.
It is my pleasure to welcome you to the Minerals Council of Australia’s Parliamentary Dinner.
This is a very important annual event for the minerals sector.
Most of our workplaces and our operations are distant from this building.
Whether it is the red dirt of the Pilbara, the coal fields of the Bowen Basin, the dry heat of the Tanami Desert, we must go where the geology draws us.
So tonight, and the last few days, represent a critical opportunity for the industry to explain, to listen and to understand.
Prime Minister, we greatly welcome your attendance tonight.
We also appreciate your continued steadfast support for the hundreds of thousands of men and women who directly and indirectly benefit from this sector – as employees, shareholders, communities or businesses.
We also welcome the continued support of parliamentarians from both major parties and the cross bench, and we were pleased to host Opposition Leader, Bill Shorten at a luncheon address earlier today.
Ladies and Gentlemen, the recent heady years of price and investment surges are behind us.
We’re back to what we know to be the long-run experience of mining in Australia – where no-one owes us a living, where cycles come and go, where cost competitiveness and productivity are the life-blood of survival and success. Australia as a whole is grappling with big economic challenges. Commodity prices are lower, growth in our major trading partners- while still comparatively strong - is slowing. Community expectations, however, both of governments and industry, are higher than ever.
Prime Minister, we know that the impact of the ‘normalisation’ of commodity prices on the federal budget has been substantial. But we cannot escape the implicit logic of the commodity price cycle. In fact, the scale of the budget revisions from the price falls in iron ore and coal underlines one important fact. That the community did share mightily in the return from buoyant commodity prices.
The Reserve Bank recently modelled what Australia would have looked like if there was no mining boom.
Household incomes would have been 13 per cent lower.
Real wages would have been 6 per cent lower.
And unemployment would have been 1.25 per cent higher.
That’s 150,000 jobs across the Australian economy that would not have existed without the mining boom.
Over the past decade, revenues from company tax and royalties from the minerals industry alone have totalled more than $156 billion. And these are not simply statistics– these are real jobs, generating real wealth, impacting real Australians.
The contribution flows from the regions, trades skills and fabrication sectors all the way through high technology, science and innovation. And, proudly, the benefits of this sector flow directly to Indigenous Australian communities in a way other industry sectors are only starting to understand.
And, the mining industry’s strong contribution to the economy and the budget is not going to go away.
The resources industry invested one trillion dollars in expansion over the decade. The ‘engine’ of the Australian mining industry is four times bigger than it was a decade ago. That will guarantee a long-term dividend for the nation. It will deliver jobs, export income, strong communities and hundreds of billions of dollars in taxes and royalties over coming decades.
But – and I can tell you from first-hand experience – the rest of the word holds no deference for Australia’s mining heritage. They thirst for new resource investment and, as Australians, we must be vigilant in maintaining our competitive edge.
In the first 21 months of the Abbott Government there have been some significant achievements in improving the competitive environment.
The carbon tax is gone. In just two years it imposed a $2.5 billion hit on the minerals sector. None of our competitors – in any country or in any commodity – faced such a burden.
The Minerals Resource Rent Tax is gone. It represented a latent risk to mining investment in this country. And it was never necessary.
The negotiation of free trade deals with Korea, Japan and China are major achievements that will open up new opportunities for Australian industry for decades to come.
Moreover, the Government’s negotiation of a nuclear safeguards agreement with India will open up that fast growing market to Australian uranium.
There are still critical challenges ahead.
We are disappointed that legislation on the ‘One Stop Shop’ for environmental approvals has been delayed in the Senate.
Not for many years has it been this difficult to invest in new projects and this type of streamlined approval process is critical.
We look forward to the outcomes of the reviews the Government has initiated into key policy areas, including taxation, the Federation and industrial relations.
We welcome the Government’s commitment to a lowering tax when fiscal circumstances permit. This should include corporate tax.
We believe that our rigid workplace relations laws must be part of the reform agenda.
Prime Minister, we at the MCA recognise – as you have said many times before – that the business community shares the responsibility to make the case for economic reform.
The minerals industry will continue to play its part.
We also understand the importance of telling our own story in a way that contributes to a deeper understanding of mining in the Australian community.
Last night, the MCA launched a new Monograph which traces the story of Australia’s modern iron ore industry.
The work of the talented young historian, David Lee, documents the journey of ambition and achievement that has seen the Pilbara become the jewel in the crown of Australia’s mining industry.
David Lee reminds us that there was nothing inevitable about the industry’s success. The scale of the infrastructure challenge alone was monumental. And for many long years over the last half century iron ore prices were low and margins slim.
The story of Australia’s iron ore sector – and indeed the Australian mining sector as a whole - is one of persistence and perseverance as well as world-leading innovation and creativity.
Of course, the need to deepen community understanding of our industry is in no way confined to iron ore. It goes much, much wider than that.
For many in the industry, this challenge crystallised in the past year with the push from some quarters on mining ‘divestment’.
Decisions were taken, including at a leading university that tarnished the reputation of resource companies quite unfairly, and based on misleading information.
I note this episode only to underline why communicating what we do, and its connection to the interests of the Australian people, is an abiding focus for our industry.
And we aim to do better.
I’m pleased to announce tonight that the MCA will establish a new annual flagship event – the Australian Mining Industry Lecture.
And I’m delighted to announce that Professor Geoffrey Blainey has agreed to deliver the inaugural lecture.
As many of you know, Geoffrey Blainey is not just one of Australia’s most distinguished historians. He is, without question, our pre-eminent mining historian. His classic work, The Rush That Never Ended, is now in its fifth edition.
Professor Blainey will speak on the topic: ‘Mining and the Australian People: The long view’. This event, to be sponsored by BHP Billiton, will be held in Melbourne in early September.
So Prime Minister, in closing I want assure you that when you say business needs to be in the arena, we at the MCA take you very, very seriously.
With that, Ladies and Gentlemen, would you join me in welcoming the Hon Tony Abbott, Prime Minister of Australia, to address this annual Parliamentary Dinner.