E&OE
Subjects: Wheatstone LNG investment, mining tax, resources boom and economic pressures
GLEN BARTHOLOMEW: The Resources and Tourism Minister, Martin Ferguson says Australia should not resort to protectionist measures to shelter local industry from the impact of the resources boom. Mr Ferguson says the Government acknowledges the boom and the high dollar are hurting other areas of economic activity in the country, but he’s rejected calls for the country to mount a narrow defence of Australian products. Let’s hear from Martin Ferguson now, he spoke with NewsRadio’s Marius Benson this morning.
MARIUS BENSON: Martin Ferguson, the world still wants Australia’s resources, so even with the downturn in the global economy, and the anticipated worsening of that, how’s the outlook for Australia’s markets?
MARTIN FERGUSON: Wheatstone $29 billion investment decision demonstrates that Australia is still a very attractive place for investment. It effectively means that we’ve now got $140 billion in new investment building a variety of LNG projects on the west coast and the east coast to actually source our LNG to the energy hungry Asian market.
MARIUS BENSON: There are expressions in the papers again today from resources sectors and the corporate world more widely, that concerns about taxation, there’s the mining tax and there’s also the carbon tax, are they negatives that are playing against Australia’s marketing?
MARTIN FERGUSON: I think it’s understood that terms of the mining tax it is dusted and settled. We’ve got a position at the moment of record commodity prices and in many ways very high profits being earned by our major mining and petroleum houses. Despite the proposal to introduce a mining tax, and I might say, a tax on carbon, the investments continue to come our way. Only this week the $29 billion Wheatstone LNG project, the biggest ever investment by Chevron in Australia, sends a very important message internationally - Australia is open for investment, it is attractive. We are very well positioned to source the resource and energy products required in Asia.
MARIUS BENSON: The Greens and the independents are both calling for an expansion of the mining tax to cover gold in particular, is that going to be considered by the Government?
MARTIN FERGUSON: The Government went to the last election with a very clear proposal on the mining tax. That effectively meant that we would confine the tax to coal and iron ore. Now, we’ve got no intention of breaking our word with the Australian community.
The second exposure draft is out there. There has been very detailed consultation and reworking of that document to meet the agreement entered into prior to the last election. I simply say to the Greens and independents – it’s about time they moved on. This is an appropriate taxation outcome. Two resources, coal and iron ore, that are experiencing very high profits at this particular point in time in the commodity price regime.
MARIUS BENSON: And what are your thoughts on the rest of the Australian economy, particularly manufacturing? They say that they’re the “low tier”, the second string of the economy, and they are suffering as a result of the resources boom.
MARTIN FERGUSON: Look, the resources boom clearly is having a bit of an impact, because of the strength of the dollar - the dollar from commodity prices -on other sections of the economy, and tourism is a prime example. Similarly in manufacturing there is some pressure, but we have got to make sure we get our manufacturing plans up to scratch and that they are able to compete successfully with all these projects that are actually in the investment pipeline in Australia at the moment.
MARIUS BENSON: As the Minister for Resources and the Minister for tourism, do you feel like you’re fighting yourself in those twin portfolios?
MARTIN FERGUSON: I suppose resources and energy are going exceptionally well. But on the tourism front, in many ways, our biggest problem is the fact that the Australian economy is going so well. With the strength of the Australian dollar, too many Australians want to go overseas for a holiday and that is putting real pressure on the domestic tourism market. And I understand the pressure on the market, we’ve just got to try and sell the product and encourage Australians to have a holiday back home. But on the international market, year on year, this is an amazing achievement. We were 3 per cent up, built principally off the back of the strength of the economy and business tourism, but a lot of other countries wish they were as well placed as Australia.
MARIUS BENSON: Martin Ferguson, thank you very much.