COMMENT: The 2015/16 Budget is a cautious document that seeks to address Australia’s near-term growth challenge but falls short of preparing the ground for long-term reform.
In an economy experiencing below-trend growth, the minerals industry recognises the risks surrounding a sharp fiscal contraction.
It is important, however, that the Abbott Government not lower its sights when it comes to longer term fiscal repair and structural economic reform on tax and workplace relations.
The strong emphasis on supporting families and small business needs to be matched in the future with a coherent reform agenda that lifts Australia’s growth potential and makes the economy as a whole more internationally competitive.
The introduction of a two-tiered company tax structure undermines the Government’s stated objective of a ‘lower, simpler, fairer’ tax system.
The Budget recognises the contribution of strong mining exports in coming years as production increases following the largest mining investment boom in Australia’s history. It notes that the volume of iron ore exports has doubled over past 5 years and is expected to increase by a further 8 per cent by the end of 2016-17 with export values exceeding $90 billion.
The decision to deny FIFO workers the zonal tax rebate will impose an additional burden on employees commuting to remote locations. Given its inclusion in the tax discussion paper, this issue should have been considered as part of the Government’s Tax Reform White Paper process.
The Australian mining industry is an acknowledged leader on tax transparency will participate actively in consultations on a new voluntary code.
Brendan Pearson is the chief executive officer of the Minerals Council of Australia. This release was originally published on the Minerals Council of Australia website, which can be viewed here.