Subsidies for mining stay low

Figures contained in a recent Productivity Commission review show subsidies to the mining industry are much lower than claimed by some critics of the sector.

For the 2013-14 financial year, net total federal government assistance came to $285.7 million.

That was up marginally from $277.7 million in the financial year previously, and substantially lower than many other sectors, including manufacturing, which enjoyed more than $7 billion in support.

Agriculture was also a major beneficiary of largesse, at $1.5 billion.

The level of taxpayer support for mining was an order of magnitude lower than previously claimed by the Australia Institute, which in 2013 argued that the figure was $4.5 billion.

However, part of the discrepancy is due to the inclusion of fuel rebates as ‘subsidies’ by the institute, resulting from the way taxes are collected to fund roads.

The intention is that the federal fuel excise is levied solely on public road users, though in reality miners and manufacturers pay the levy immediately on buying petrol, and are able to reclaim the portion used for running equipment and machinery.

In the commission’s figures, the single biggest item of support for mining was through the research and development tax incentive, at around $300 million.

Other spending items included the national low emissions coal initiative ($44 million), and CSIRO research measures ($87 million).

Total budgetary assistance for mining was $520.7 million, however, other government involvement, such as tariffs on inputs used in production, reduced the figure in net terms.

Chamber of Minerals and Energy chief Executive Reg Howard-Smith said the amount was much lower than some had contended.

“Not content with dismissing the valuable economic contribution made by industry, anti-resources activists routinely mislead the community on the level of government assistance and subsidies available to the resources sector,” Mr Howard-Smith told Business News.

“(The) report should end the debate on this issue, but these activists have never let facts or evidence interfere with their campaign rhetoric.

“The resources sector continues to be a substantial contributor to state royalties and Commonwealth taxes and remains a key contributor to both state and national economies.

“The 2015-16 state budget again highlighted the economic importance of the resources sector, with more than 14 per cent of the state government’s revenue coming from mining royalties alone.”