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Steadfast resources rules critical for our national economy

CCIWA Chief Economist 

Aaron Morey 

The Chamber of Commerce and Industry WA (CCIWA) is concerned by a call today from the former Chair of the ACCC to introduce a resource rent tax on the mining sector.

We strongly caution against tapping the resources sector for additional revenue to suit the Federal Budget as and when required. These views are troubling to Western Australian businesses and many across the Australian community. Our nation had this discussion 15 years ago and very clearly sided against changing the goal posts mid-game for the resources sector.

Western Australia’s world-leading resources sector is critical to sustaining and raising the living standards of all Australians. It provides tens of thousands of jobs, critical business investment and leads the nation’s innovation efforts through its adoption of technology, including decarbonisation.

Some outside Australia’s industrial states appear to need a sense check on how fundamental the resources sector is to the national economy. The global contest for capital is heating up, not cooling off. We need to be ahead of the pack, not implementing tax and regulatory changes that would see capital flow elsewhere. The sovereign risk that changing the goal posts mid-game pose to Australia’s attractiveness as an investment destination, should not be underestimated.

Australians back decision-makers capable of controlling their spending, and enabling economies to grow, rather than propping up unsustainable spending.

This is the same mistaken argument that is applied to the GST, which sees funds arising from the effort and development of one state, as belonging to another. It’s worth reminding every Australian that just 70 cents comes back to WA from every dollar our state contributes to the Canberra GST kitty. This is not special treatment.

Our nation should take time to reflect that the success of Western Australia’s economy props up states which have been far less prudent with their spending commitments. That’s not something you want to penalise, it’s something you want to spur on and use as a model for other states to adopt.

It is critical that debates about the PRRT and other regulatory costs for the minerals and resources sector are now settled.

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