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MCA WELCOMES AUSTRALIA-JAPAN FREE TRADE AGREEMENT

The Minerals Council of Australia welcomes the Free Trade Agreement between Australia and Japan announced today by Prime Minister Tony Abbott and his Japanese counterpart, Shinzo Abe. Japan is Australia’s biggest coal customer and our second largest trading partner. In 2012-13, Australia exported $25.7 billion worth of coal, iron ore, copper and other concentrates to Japan. Coal contributed $13.7 billion of that total.

APPEA WORKPLACE BLUEPRINT UNDERSCORES THE REFORM IMPERATIVE

The Australian Petroleum, Production and Exploration Association blueprint for labour market reform released today is an important contribution to the debate on Australia’s productivity and competitiveness. The current industrial laws have increased the power of trade unions and tribunals at the expense of direct relationships between employers and employees in the workplace. Limits imposed on choice and flexibility have increased project costs and undercut the industry’s capacity to sustain and create more high-wage jobs. If Australia is to be competitive in the 21st Century, labour market reform is critical. Just last week, BHP Billiton revealed that its costs for a truck operator in the Bowen Basin were approximately 1.5 times more than the same truck at its operations in New Mexico in the USA. In his final public speech before stepping down as the head of the Australian Workers Union Paul Howes acknowledged that Australia’s industrial relations system is “dragging us down”. Without change, Australia will slip further behind its global competitors who are hungry for our market share in resources and energy. Bureau of Resources and Energy Economics data shows there is up to $327 billion worth of projects in 2015 that could be developed with the right policy and commercial settings in place. These projects would generate many thousands of new jobs and billions in taxes and royalties for Government. We have to get the settings right to deliver these projects. Abolishing the carbon tax, which includes a six cents per litre impost on diesel, and the Minerals Resource Rent Tax will be a positive first step in an industry where our international competitors face no such comparable imposts. But more will need to be done to help restore Australia’s competitiveness.

Minerals exports: China Japan Korea

Australia’s mineral exports to China. Australia’s three highest earning exports to China in 2012-13 were minerals: The total value of all minerals exports to China in 2012-13 was A$62 billion. Minerals exports made up 73 per cent of total goods and services exports to China in 2012-13.

REPEAL OF THE CARBON TAX WILL BOOST WA MINING

The complete repeal of the carbon tax will provide early and important relief to West Australian businesses through lower energy costs and the removal of the shadow carbon price on diesel. An estimated 10,000 WA firms are paying an extra six cents per litre on diesel as a result of the carbon tax package, costing businesses in the state more than $200 million per year. Unless the carbon tax is removed by 1 July the diesel tax will increase further as the carbon price increases to $25.40 per tonne of CO2. These extra costs particularly disadvantage WA’s mining sector, which has no choice but to use diesel-powered shovels, excavators, trains and electricity generation to operate in remote locations in such a large state. Calls today from Professor Ross Garnaut, a key designer of the world’s biggest carbon tax, to halt the repeal of the carbon tax should be ignored. Defenders of the carbon tax, including Professor Garnaut should explain why WA businesses are contributing to a punitive tax that Australian carbon tax raised more revenue in its first six months than the entire European emissions trading scheme did in its first six years. And these defenders might also explain why the Australian carbon tax raised as much revenue in its first 6 weeks as the Californian carbon trading scheme is projected to generate in its first two years. The full and early repeal of the carbon tax will provide an important boost to confidence in the WA minerals sector which is operating in an environment with subdued global commodity prices.

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