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By: Brent Steedman
30 Oct 2020 3 min read
The last 10 years has seen the 2000s resources boom stabilise, and the sector has not been without its controversy, with native title battles, environmental lobbying and workplace health and safety issues to reckon with. Yet the sector continues to trend upwards without a boom to propel it forwards.
The great blind spot is our exports. The Productivity Commission estimated in March this year that Australia exports close to 90% of the commodities it produces. We produce more gas per capita than any other country, yet locally, our gas prices are double that of anywhere else. A better balance between international export and domestic supply is on the horizon.
It’s clear that the industry has largely funded its own investments. The result has been an allocation of investment to large projects focused on global markets like iron ore, coal, and LNG. To change this focus and increase investment focused on the domestic market requires the Government to make changes to key challenges faced by the resources industry including access to resources, complex regulation and investment incentives. The recently announced National Gas Infrastructure Plan is a welcomed start. There is a clear need to both increase the volume of available gas and decrease its cost. Other opportunities presented by the Government include the $1.3b modern manufacturing initiative and $18b Technology Investment Roadmap, providing opportunities for resource industries like lithium, nickel and copper.
In our report we cover:
We were initially writing the ‘Federal Budget: A 10 year retrospective’ report before COVID-19 as an advocacy piece for more industry investment and support. Of course, the way the year started is not the way the year is ending. Many sectors that had been left to their own devices are now key for our recovery. Sovereign capability. Jobs. Digital economy. Modern manufacturing. Renewable future. Deregulation. Innovation. These are the terms we will use as we settle into COVID-normal.
Our report looks retrospectively at 13 different industries, the investment made into them by Government and their contribution to GDP. This is then overlaid with the opportunity we see for industry in this new normal based on recent Government announcements.
With the Australian economy the weakest it has been in 23 years, Labor has handed down its third Federal Budget delivering its second consecutive surplus, and setting the Government’s agenda as we head into an election cycle.
There is an overlooked economic opportunity in Australia’s mid-sized businesses – with the right incentives and tax policies in place, they can grow in size, scale and reach. They can employ more people, collaborate with other Australian businesses, and better contribute to Australia’s bottom line.