The Fraser Institute’s Annual Survey of Mining Companies for 2016 released overnight confirms the need for Australian state governments to lift their game when it comes to attracting mining investment.
The Canada-based Fraser Institute survey, which collates views from mining company executives from around the world, shows Australian states are slipping behind major competitors in terms of investment
attractiveness and policy perceptions.
Western Australia has fallen from the number one to the third ranked jurisdiction as the most attractive place to undertake mining investment – this highlights the risk to mining investment and jobs in WA posed by the ill-considered Grylls iron ore tax proposal.
The survey demonstrates that other jurisdictions around the world are increasingly hungry for new investment. Politicians who propose huge new taxes in a cavalier manner will inevitably damage the state and national reputation as an investment destination.
While Queensland’s investment attractiveness ranking improved 6 spots to 10th, NSW dropped to 62nd, down from 38th in 2015, while Victoria ranks 57th and Tasmania 56th.
South Australia has fallen 3 places to 13th. The recent problems with the reliable and cost effective supply of electricity in South Australia, which cost the mining and minerals processing sector $357 million in lost output, are highlighted by a respondent:
The push to renewable energy without transitional arrangements has led to a power price crisis that is deterring investment in South Australia.
Company President of a producer company with less than US$50M.
NSW is now the lowest ranked Australian jurisdiction in overall mining investment attractiveness and the commentary in the Survey points to increasing red tape and a bureaucratic approval process as a cause for the slide.
Policy reform remains important at the national level.
With Australia’s minerals industry facing an effective tax rate of 54.3 per cent, it is critical that a phased reduction in the company tax rate is introduced to remain internationally competitive.
Our energy policy must also be refocused on the imperatives of reliable and affordable energy. Australia has fallen from having the lowest energy costs just over a decade ago to 27th in the developed world.
Today’s national accounts demonstrate that the Australian mining industry is a significant contributor to the Australian economy through growing export revenue, jobs, and taxes paid. We cannot afford to sit back and allow our competitors to take advantage of our complacency.