**Check against delivery
First, as Minister for Tourism, welcome to Canberra on a very brisk morning.
I’m sure you will be seeing plenty of Parliament House this week, but the national capital has a wealth of other attractions if you do find time for a bit of R&R.
Secondly, as Minister for Resources and Energy can I say that I consider myself among friends here today.
As friends I acknowledge that sometimes we will disagree – and sometimes robustly – but can I also say that as friends we have always been able to sit down in a room and share our views and concerns in a professional manner.
I am pleased to be here today and to participate in Minerals Week in the same constructive way as I have in previous years.
For more than 3 decades, Minerals Week has been a showcase for the industry’s achievements and its future aspirations and challenges.
Today’s programme describes the topic of my address as “The Policy Imperatives”.
Let me say at the outset I am confident everyone in this room would agree on the policy outcomes that we need to achieve in the resources sector.
We want an industry in which:
- workers are safe;
- the environment is protected and the community continues to grant a licence to operate;
- Australia grows its share of resources trade internationally in a way that is profitable for the industry and returning a fair share to the community;
- the industry has access to the skilled workforce it needs; and
- access to the infrastructure it needs to get its products to market, but without unfairly burdening the community.
Safety
In relation to the first of these matters – safe workplaces – you may be aware that last Friday the Ministerial Council on Mineral and Petroleum Resources signed off on the implementation plan to achieve improved uniformity in the regulation of mine safety across Australia.
The agreed outcome, like much in life, represents a compromise.
The end result will still see minor differences in the legal structure of mining safety regulation across the three main mining states from other jurisdictions, but I am confident that New South Wales, Queensland and Western Australia will ensure that at an operational level each system operates in a consistent manner.
This was the agreement last Friday and it clearly represents a major advance in the regulation of mining safety.
Licence to Operate
As has been the case for decades, the industry faces constant scrutiny from the communities in which it operates about environmental practices and its relationship with other land users.
But there is a further area that I am most interested in and I know many of you are making good steps forward.
Indigenous Australians
Mining companies that are leading the way in ensuring that Indigenous Australians have a real stake in this country as valued employees; as owners of capital; and as contractors with thriving businesses are making a great contribution to Australia’s future and addressing one of our greatest historic areas of neglect.
In this context I make two observations about Native Title and Indigenous Land Use Agreements.
Too often in the past, agreements have failed to deliver broad community benefits or endured in a way that will provide lasting benefits for future generations.
I believe it is incumbent upon all of us to ensure that Native Title Agreements relating to mining projects are drawn up to deliver intergenerational benefits.
Second it is also becoming apparent that in negotiating Native Title Agreements greater care needs to go towards ensuring that the benefits are more widely spread amongst Indigenous communities.
Growing Australia’s Market Share
I now turn to the question of growth.
All Australians will benefit if this industry prospers.
It is one of our competitive strengths and we all want it to grow its market share and reap the benefits of the enormous demand associated with the rise of China and India.
A decade ago no one would have predicted the China of today and India a decade from now is an equally unknown quantity.
These are turbulent times – even for an industry which has lived with the cycle of boom and bust its entire history.
In the midst of uncertainty, we – the Australian Government and the mining industry – share a common goal.
We both want Australian resources, technology and services to be fuelling China and India’s continuing development and keeping Australia prosperous.
Of course, as Benjamin Franklin said, the only two things guaranteed in life are death and taxes.
And today I know it is the second one which is troubling you the most.
So let’s go to the elephant in the room.
The Resource Super Profits Tax
As the Prime Minister said yesterday, we are only at the very beginning of what will be a long and detailed process.
The first progress report from the Resource Tax Consultation Panel has been delivered and is now being considered by ministers.
I know that many of you have consulted with the panel and I thank you for your engagement in this process.
We want to continue to work with you in a constructive manner.
Many of you have suggested that a profit based tax system has some merits.
The profit based system the Government is proposing provides fiscal stability – it turns around the lose-lose situation of the royalties based system.
The idea of this tax is that during the good times, a profit based system provides the Australian community with a fair return on the nation’s non-renewable resources.
Equally, during the bad times, a profit based system provides timely tax relief.
We know you are concerned about things like retrospectivity, the treatment of minerals with different outlooks and cost structures, and taxing points.
And we are looking at ways your concerns can be addressed, for example, through generous transition arrangements.
I am not going to get into the detail of the Government’s modelling and analysis nor the industry’s commissioned analysis that was released last night.
This is a free country and we are all entitled to our views and independent assessments.
I’m interested in the real work that will be done through the consultation process – sitting down together, opening up the books, jointly understanding the modelling and coming up with solutions.
The Resource Tax Consultation Panel is open for business and it is listening.
I know that what works for one business may not work for another.
That is why what we need to achieve as a Government is a final package that gets the balance right for everyone.
Some of you will remember concerns around the introduction of the Petroleum Resource Rent Tax.
That was 25 years ago.
The PRRT has turned out to be one of the most stable taxes in the world.
The industry supports it, and exploration and development has flourished.
We are committed to making sure that we deliver a stable profit based tax for the rest of the resources sector as well.
Future investment
While investment decisions will always take account of taxation regimes, they are not blinded by it.
Investment decisions are based on more than tax.
So are long-term corporate profits.
So is Australia’s international competitiveness.
A 40 per cent tax didn’t stop Australia’s biggest ever single investment – the $43 billion Gorgon project.
Let’s look at how Australia stacks up.
We’re firmly at the top end of international competitiveness, with:
- A stable political system
- Open, transparent and competitive markets
- Sound regulation and good governance
- A resilient economy
- World-class expertise, not least within Geoscience Australia
- Supportive and robust financial services
- Many years worth of un-tapped resources
- Reliable transport with extensive air links
- Good security for staff and contractors
- Few language barriers
- And many satisfied, long-term customers who can count on our reliability
We rarely talk about all these advantages together, but we all know they do matter in the scheme of things.
The outlook for world economic growth is positive, with an expected recovery in many energy and minerals commodity prices and demand.
Infrastructure
I said earlier that the industry must have access to the infrastructure it needs to get its products to market.
But the community must not be unfairly burdened with the costs.
The proposal we have put on the table gives the Federal Government the capacity to fund more infrastructure to help the industry expand and meet its full export potential.
To address infrastructure bottlenecks the Australian Government will make annual contributions, starting at $700 million from 2012.
This investment is intended to directly benefit the resources sector by removing capacity restraints that have the potential to slow future growth.
The Treasurer’s package will deliver more than $5.6 billion over the next decade to fund the roads, railways, ports and utilities we need to unlock Australia’s resource wealth.
This builds on the $22 billion ‘Nation-building for the future’ package announced in last year’s Budget that the resources sector is already benefiting from.
The National Ports Strategy is another huge undertaking, bringing together three levels of government.
It aims to deliver long-term coordinated planning of Australia's major ports and their transport corridors.
But the Government is not just concerned about physical infrastructure, it is already working on finding ways to assist industry in meeting its needs for skilled workers.
Skilled Workforce
For some time the Government has recognised that without taking steps now this industry’s increasing demand for skilled labour will not be met.
This is why we set up the National Resources Sector Employment Taskforce.
The Taskforce is stimulating a national conversation about the resources sector’s increasing demand for skilled labour.
It will be reporting back to us by mid-2010 with a comprehensive plan to address skilled labour needs – it is a report I am looking forward to and one that will deliver further benefits to this sector.
Even before this Taskforce delivers its report there are other practical initiatives being delivered by the Government to address the issue including:
- The Trade Training Centres in Schools Program - a practical, hands-on initiative the Government is delivering which will be good for industry and good for the community;
This program will provide $2.5 billion over 10 years to enable all secondary schools to apply for funding of between $500,000 and $1.5 million for Trade Training Centres.
These centres will be critical to ensuring we have the skills base we need as a nation moving forward.
- And of course the new $661 million Skills for Sustainable Growth Strategy announced in this year’s Budget will make the investment necessary to ensure that Australia has the skills it needs to support a growing economy.
The four-year skills package will deliver:
- up to 39,000 additional training places in sectors facing high skills demands through a $200 million investment in a new Critical Skills Investment fund;
- support for around 22,500 new apprenticeship commencements through an $79.4 million extension of the successful Apprentice Kickstart aimed at small to medium businesses;
- an offer to the States and Territories to provide a guaranteed entitlement to a training place for all Australians under the age of 25 years to ensure young people have every opportunity gain a qualification;
- numeracy, literacy and language courses for up to 140,000 Australians to improve their quality of life, career prospects and productivity; and
- better training for the 1.7 million Australians studying in the vocational training system.
Immigration
We also understand given emerging skills shortages a sharply focussed skills migration program is needed.
Foreign skilled labour is an important driver of economic growth and contributes to increased productivity and labour force levels.
It also benefits migrants by ensuring they have a job with a direct match to their skills on arrival in Australia.
By enabling mining companies to work with state government to develop state and regional migration programs the Government’s reforms deliver a more demand-driven skilled migration program that meets the needs of the economy in sectors and regions where there are shortages of skilled workers.
Conclusion
The Australian Government looks beyond windfalls, beyond booms.
We want this industry to be profitable for the long haul.
We also want the Australian community to receive a fair return from the once-off development of its non-renewable resources.
Enduring value means harnessing revenue to prepare for future growth, to smooth the fiscal cycle, and to do all we can to create long-term, diverse economic opportunities.
We only get one chance to make our non-renewable resources work for the nation.
Now is the time to talk, to compare forecasts, to argue the case, to resolve issues and get back to our core business - growing this industry safely, sustainably and profitably.
Thank you.