The strong resources sector featured prominently in the Federal Budget that was handed down on Tuesday this week.
Record tax revenue of $41 billion contributed towards the Federal Government delivering its first budget surplus in 15 years. The $8 billion surge year on year contributed half of the $4 billion surplus.
Whilst many of the revenue gains were then targeted back into cost-of-living relief across the board, resources fared well from future investments.
The sector welcomed key Budget initiatives related to the resources sector, such as the Federal Government’s investment of $57.1 million to develop critical minerals international partnerships and $23.4 million for critical minerals policy development and project facilitation.
This is on top of the $2 billion Critical Minerals Facility and $1 billion targeted to adding value in the resources sector under the recently passed National Reconstruction Fund.
The Critical Minerals Facility is managed by Export Finance Australia with project funding available to projects that are aligned with the Australian Government’s Critical Minerals Strategy and are otherwise in Australia’s national interest. The National Reconstruction Fund offers debt and equity funding for value-adding of resources projects as well as renewable energy, amongst other priorities.
The Government also announced changes to the Petroleum Resources Rent Tax, with an extra $2.4 billion to be raised over the next four years. Given the changes were more about bringing forward payments rather than increasing the tax, there was overall a muted response from the industry. There were plenty of calls from economists for a major overhaul of the tax, including from Chris Richardson who called it a ‘broken tax’, so the final measures were likely much better than what it could have been.
The Hon Madeleine King MP, Minister for Resources and Minister for Northern Australia will soon release Australia’s new critical minerals strategy, which will outline how Australia can seize the great opportunity to leverage our critical minerals to feed global demand for clean energy, while creating new industries and jobs in Australia.
Many see this as further proof that an Australian-made battery sector might not be too far off.
On gas, the Federal Government will spend $6.7 million to develop a Future Gas Strategy to support Australia’s energy system to reach 82 per cent renewables by 2030 and become cleaner, cheaper and more reliable. With both the Federal and NT Governments supportive of the development of the Beetaloo Basin as a low CO2 source of gas for the east coast, we can probably expect to see this feature more prominently in next year’s papers.
Queensland Resources Council Chief Executive Ian Macfarlane said when resources are strong, the economy is strong and every Australian benefits.
Long live the resources sector!