MCA Pre-Budget Submission urges repair and reform

The Abbott Government should stay the course on repairing the Commonwealth Budget and outline a national competitiveness agenda for the next decade.   These are among key policy recommendations outlined today in the 2015-16 Pre-Budget submission of the Minerals Council of Australia (MCA).

Expenditure, tax, structural and regulatory policy settings all need to support strong economic growth and create an environment conducive to increased productivity, cost competitiveness and enterprise flexibility.  Reducing uncompetitive policy burdens and removing roadblocks to growth is vital, especially for industries like mining that are proven areas of competitive strength and large export earners.

The 2015-16 Budget can and should be the circuit-breaker that highlights what needs to be done to sustain the growth and shared prosperity which mining has helped to underpin.

Four broad policy imperatives are outlined in the MCA submission:

Long-term fiscal repair: The size of Australia’s budgetary challenge means the Coalition government must stay the course on fiscal repair with the emphasis on controlling and better targeting government spending.

No new taxes:  The Government’s White Paper on tax reform is the right place to consider changes to the tax system.  The Government should therefore rule out higher taxes on business and wage earners in the Budget.  Ritualistic attacks by the anti-mining lobby on fuel tax and exploration tax arrangements should be ignored, as they have been by the major parties in the past.  The latest tax survey data shows the minerals industry tax ratio has risen to 47.1 per cent, with nearly half of every dollar in profit paid as royalties or company tax.

Building national competitiveness:  The 2015-16 Budget should outline a national competitiveness agenda for the next decade.  It should identify core goals, outline a plan to engage the community on Australia’s competitiveness challenge and detail a work program that can help build reform momentum.  The Department of Prime Minister and Cabinet, the Treasury and the Productivity Commission should be charged with coordinating and delivering on this work program.

Expanding economic opportunities:  The boom decade from 2003-04 boosted living standards and increased economic opportunities for thousands of Australians working in the mining industry, including in regional and remote communities.  A singular achievement has been the growth in job opportunities and economic empowerment for many Indigenous Australians.  With more subdued industry conditions, it is critical that policies are geared to building on what has been achieved.  A critical step would be for the Government to adopt the Indigenous Community Development Corporation (ICDC) model for the improved management of payments and benefits negotiated by Indigenous groups.

The mining boom gifted Australia a ‘once in a century’ economic windfall.  Yet it also gave Australia’s political class greater latitude to pursue policies and agendas that can damage investor confidence and erode industry competitiveness.  That buffer is now gone. 

The repair and reform challenge in Australia begins with the Federal Government, but by no means ends there.  All parties and all members of Parliament share responsibility for ensuring Australia’s democratic system can respond to today’s economic challenges in a way that fosters growth and shared prosperity.

The MCA Pre-Budget Submission can be downloaded here:

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