OPINION: AUSTRALIA BECOMING UNINVESTABLE
Australia is becoming increasingly uninvestable.
Broken approvals processes for resources projects, activists in the courts and shareholder meetings, and an increasingly ideological government that has the wrong priorities threatens the prosperity of every Australian.
The Coalition stands ready and has called on the Government to work with us to fix this broken system.
The resources sector is at the forefront of this struggle.
Many of the hurdles faced by our mineral and energy commodity sector would seem farcical if faced by individuals or small businesses.
Imagine for a moment that you run a small cafe. You employ five staff. While costs are rising, business has been going well enough to justify opening a second cafe which will employ another five people.
But when you start planning your expansion, you realise you must apply to three different levels of Government and half a dozen agencies for permits to expand.
It will take four years to get your applications processed, you’ll need to resubmit six times, you’ll need to consult with individuals who live hundreds of kilometres away and will likely never visit your cafe, and worst of all, the people you must apply to are also funding a group of lawyers solely dedicated to shutting your business down.
It hardly seems worth it.
Sure enough, the time and expense of applications and legal challenges all but shuts down your expansion plans, and now you’re left with nothing to show for all the money and effort you’ve spent and are faced with having the difficult conversation with five families about why you can no longer fulfil your promise to give them jobs.
This is what our most productive and wealth-generating industries are up against every day.
Hurdles put in place by the Government include funding activists to shut down projects, new productivity-killing Industrial Relations legislation, heavy-handed market interventions, and overreaching environmental laws.
Faced with these hurdles, sane men and women of resource company investment boards are choosing instead to put their money into countries that actually demonstrate they are wanted.
To all those who say “mining companies still make plenty of money”, it is important to remember that companies don’t choose to invest in a vacuum. It isn’t a choice of investing or not investing. It is always a choice of investing here or investing somewhere else.
And when they are not investing in Australia, they are investing in places like Canada, making the lives of Canadians better instead.
That’s not to say that we would wake up one morning with the sector having disappeared entirely. Bit by bit however, as fewer new projects get approved, and companies quietly quit marginal projects, we will all be left poorer.
Minerals Council modelling shows that a 1 per cent productivity decrease in the mining sector by 2030 would see every Australian family $11,700 poorer each year, with a 9.4 per cent real wage cut and an economy $290 billion worse off.
You don’t need the whole sector to leave en masse to have real and significant consequences from poor policy.
Without the investment flowing in, we will no longer have the same levels of wealth generated that supports over a million jobs, tens of thousands of businesses in the supply chain, and the billions in taxes companies pay into government coffers to fund infrastructure and services.
In the past, Australia has capitalised on our abundant blessings of natural resources by offering a safe, secure, and reliable investment destination for both domestic and international capital.
For decades, Australia has well and truly reaped what we have sown. Billions upon billions of royalties and taxes, wages and salaries, supply chain contracts, sponsorships and community investment.
This investment helped drive the shift from an agrarian frontier outpost to a modern, vibrant twenty-first century nation.
It drove immigration, allowing us to become a melting-pot of cultures, as people turned towards Australia as a land of opportunity.
It helped keep small country towns alive, as communities grew with new developments in the regions.
It funded museums and cultural centres, art galleries and theatres as State and Federal revenue grew.
It helped keep Australians safe, as roads and highways were upgraded.
This investment has educated generations, as more schools were built, or upgraded, and teachers’ salaries grew.
It is difficult to comprehend the scale of the more than $70 billion of taxes and royalties paid by oil, gas and mineral resources companies in a single year.
For context, it is enough money to fully fund Medicare, the PBS and still have enough left over to build 19 new hospitals. Every year.
And that is before the economic activity generated by supply chain spending.
The wealth of investment that we have seen completely transformed Australia for the better.
However, as investment dollars turn away from Australia, it is not the profit margins of big companies that will be hurt – it is everyday Australians who will pay the price.
That is why the Coalition has proposed a number of sensible and modest reforms, starting with the natural gas industry, that the Government could implement right now.
Instead of trying to shift the blame onto industry for delays – just like their flat footed response to the release of criminals in indefinite detention – the Government should end their harmful interventions and accept the Coalition’s support to fix the broken consultation process imposed by the regulator, close statutory timeframe loopholes, offer security of process to applications already under way so they don’t have to start again under new laws, and remove bans on funding for R&D programs into new natural gas supply.
Support for a thriving resources sector should be a bipartisan position. It is now up to the Government to act before it is too late and the lucky country’s luck runs out.