Senate debates

Wednesday, 29 March 2017

Statements by Senators

Mining Industry

12:45 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

I rise to reflect today on the value of the resources sector in this country historically, in the present day and going forward. Historically, we often forget the importance of the resources sector in each of our then colonies and now states, such as your own then colony of Victoria, Mr Acting Deputy President Marshall. There was an influx of people in the 1840s and 1850s into Bendigo and Ballarat, chasing gold. They came from all around the world—China, America, Ireland and England et cetera. When you look at Queensland, for example, there is the Maranoa, with its rich gas fields; the Surat Basin; the Bowen Basin; and the Galilee Basin, which is soon to be opened up. Tasmania's economy was for a long time dependent on mining on the west coast. Savage River in the north of that area is a very rich iron ore deposit. In South Australia, Olympic Dam is underpinning the economy of that state, with its mining activities. In the home state of Senators Cash, Smith and me, again, historically, when gold reduced on the Victorian fields, many Victorians came across to Coolgardie, Kalgoorlie and Norseman. Indeed, it is a fact that Western Australia would not have joined the Federation had it not been for the overwhelming number of Victorians who said, 'If you don't support Federation, we'll form our own state.' It was that that caused Winthrop Hackett of The Western Australian newspaper and Sir John Forrest to urge that we did join the Federation, and that is why Western Australia is not named in the early words of the Constitution. The goldfields continue. The Golden Mile is still one of the biggest gold producers; indeed, it has one of the largest open cut goldmines in the world. More recently, over the last 30 to 40 years, there has been the opening up of the Pilbara, Mount Newman and, on the coast, oil and gas activities.

I had the privilege last evening of attending the Minerals Council of Australia 50th anniversary function and the launch by Professor Ian Harper of the Deloitte Access Economic review into mining and into what they call the METS—the mining, equipment, technology and services sector in this country. I commend this report because of its importance, not historically now but in the present day and going forward. I think these figures are remarkable. I will quote them from the Deloitte Access Economics report:

The total economic contribution of Australia’s mining and METS sector in 2015-16 was $236.8 billion, representing around 15% of the Australian economy. This economic activity supported a total of 1,139,768 FTE jobs across Australia, which represents around 10% of total FTE employment.

That was for the last full financial year. It goes on to say that, in the Pilbara of WA, total economic activity of mining and METS was just under $38 billion, representing 88 per cent of its activity. In the Surat-Bowen basin in Queensland, it was $18.6 billion, representing 63 per cent of regional economic activity. In the Hunter region of New South Wales, the total economic contribution from mining and METS was $15.2 billion, representing a third of economic activity. Let me repeat that figure because I think it is remarkable: in 2015-16, the contribution of the mining and METS sector was $237 billion, representing 15 per cent of the economy and 1.4 million FTE jobs across the country.

Another point being made in the Deloitte Access Economics report is that, whilst productivity is phenomenal, we must ceaselessly move to increase productivity. Again, I made the point only recently in this place that BHP Billiton and Rio Tinto are the two biggest taxpayers in this nation. When royalties and resource rent taxes were taken into account two years ago, BHP Billiton paid more than US$8.7 billion to the Australian government and state governments, particularly our own, representing a tax rate of 47 per cent. Their tax rate is 47 per cent. In 2015, Rio Tinto paid in excess of $1.5 billion in tax and another $1.4 billion in royalties to either the federal or the state governments. It is critically important that we in Australia understand the importance of the resources sector and, indeed, the fact that it underpins regional activity in Australia. The report goes on to say that in the Hunter Valley, there were 94,000 jobs in 2015-16 from the resources sector. In Queensland, in the Bowen-Surat basin, there were 100,000 jobs alone. In the Pilbara, there were 93,800 jobs from that sector. If we are to see continuing value to the Australian economy, continuing value for employment, particularly high-value employment, we must extend the productive life of mines. We must get better yields. We must continue to drive occupational health and safety and wellbeing and, of course, we must continue to apply the knowledge of research.

For those who have had the opportunity of going to both BHP and Rio's facilities in Perth to watch the management of mine sites, the loading of trains, the conduct and transport of freight, the actual loading onto ships, all done automatically from Perth—from St Georges Terrace, in the case of BHP—and the Perth airport, it just shows the level to which Australian resource technology is at the forefront.

We know this when we speak about other countries in which mining activities are undertaken. We know that most of the mining activity in Africa is managed from within one kilometre of the Premier's office in West Perth. In Panama, it is not known, the world's largest copper mine is being built by Western Australian expertise through First Quantum. Our opportunities in Mexico, particularly for mining drilling and equipment, are absolutely legendary. For young Australians, for high-value employment and export, the opportunities in that sector are enormous.

In the few minutes left available to me, I will reflect on the comments of the head of Chevron, Mr Nigel Hearne, made on 21 March and the US$100 billion Gorgon and Wheatstone projects. I like to compare that US$100 billion to the total value of the Snowy Mountains scheme if it were built today: it would be A$9 billion—less than 10 per cent of Gorgon and Wheatstone. What will these two projects, alone, deliver to the Australian economy over the 30-year life of Gorgon and Wheatstone? They will deliver more than US$1 trillion to Australia's GDP. That is 150,000 full-time equivalent high-paying jobs over that 30-year lifetime and about $340 billion to the federal revenues of this country. You can double that figure when you look at other LNG projects either underway or planned.

In this country we must have good laws. We must have a fair taxation scheme. We must have a capacity to compete with the rest of the world, because it is a highly competitive world in which we live. In conclusion, I do recommend, to those listening who may have an interest, Deloitte Access Economics' review launched last night into the value of the resources sector in this country. It is new information that all thinking Australians should have.