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Mining industry tells government to axe the carbon tax

Announcement posted by Newport Consulting 17 Aug 2011

Miners buoyant and set to spend but warn carbon tax could restrict future growth

Sydney – Thursday, August 18, 2011.The mining industry remains firmly opposed to the Federal Government’s carbon tax, believing the tariff will become a key driver in future investment decisions, making Australia less attractive for foreign investment and less competitive in global markets.

The warning comes despite the overwhelmingly positive industry outlook as the mining sector sets itself to significantly increase expenditure this financial year, in a bid to capitalise on mining boom Mark II, the latest Mining Business Outlook Report reveals.


Now in its second year, the Mining Business Outlook Report 2011-12 released today by operational management consultancy, Newport Consulting expresses the views of 45 mining executives from both small and large resources companies and draws on a series of in-depth, face-to-face interviews covering the economy, capital investment, government policy as well as the sector’s opportunities and challenges.


The report finds that more than half of the mining executives interviewed (57%) are “very optimistic” about their future growth in the year ahead and 52% are set to increase spending and investment. This is a significant turnaround from last year, when only 38% were very optimistic and only 35% planned to increase capital expenditure.


Of those mining executives who are somewhat optimistic (30%) or ambivalent (13%) about their future growth prospects over the next 12 months, the carbon tax is rated the third key reason (12%) for their less positive outlook, after increased costs and tough conditions, both at 29%.

One mining leader said, “We are cautious with our outlook because of the carbon tax and its future impact on investor confidence.”


The report’s Advice to Canberra section reveals more than half of the mining executives interviewed (52%) are calling on the Gillard government to abolish the carbon tax, indicative that opposition to the tax is industry-wide and not confined to the heavy emitting coal companies and other carbon-intensive operators. A further 12% say that the mining tax will be a barrier to the industry’s long-term performance.

The majority of mining leaders advise the government that while most of them remain optimistic and are increasing expenditure and development now, a carbon tax along with the minerals resource rent tax, could see future projects deferred or sent offshore.

The carbon tax is also rated as the equal sixth greatest challenge facing the industry, alongside attracting capital/investment, safety and productivity.

David Hand, Managing Director at Newport concludes, “The mining industry firmly believes the carbon tax will have a detrimental effect to the industry through potential job losses and project delays, which in turn will have definite flow on effects to other parts of the economy. Mining leaders are counting the costs of the two proposed big taxes and despite a positive outlook for the next twelve months, are worried about the future of the sector.”~ ENDS