Mining a key driver in budget surplus

Mining remains one of the foundations of Australia’s economy, playing a crucial role in the country’s economic stability and fiscal health, according to Minerals Council of Australia (MCA) head Tania Constable.

“Once again, the Federal Government’s final budget outcome underscores the critical role mining plays in sustaining Australia’s economic and fiscal health, benefiting all Australians,” Constable said in an statement about the Federal Government’s second consecutive budget surplus.

“The Department of Industry, Science and Resources’ September ‘Resources and Energy Quarterly’ (REQ) shows that our major mining commodities continued to make large contributions to Australia’s export earnings, with iron ore contributing $138 billion, metallurgical coal $54 billion, thermal coal $37.2 billion and gold $33 billion.”

The 2023–24 budget revealed a $15.8 billion surplus, surpassing the May forecast of $9.3 billion.

Uranium exports are also rising, with earnings exceeding $1 billion in 2023–24, expected to reach $1.7 billion by 2025–26.

However, fluctuations in demand for Australia’s bulk commodities could impact future budget outcomes.

To ensure long-term economic growth and fiscal strength, Constable is advocating for policies that encourage mining investment.

“The 2023–24 budget outcome and REQ forecasts reveal the vulnerability of Australia’s economy to fluctuations in commodity prices, highlighting the pressing need for governments to prioritise mining investment to secure the nation’s long-term economic growth and the budget’s fiscal strength,” she said.

“With these challenges confronting Australia head on, it is critically important that governments pursue productivity-enhancing policies that attract investment in mining, create more jobs, and increase the nation’s economic resilience to withstand future economic downturns.”

Constable calls for a shift in government policies to attract more mining investment, noting that restrictive regulations currently place unnecessary burdens on businesses.

“We must make Australia an attractive destination for investment again,” she said. “Without a major uplift in mining investment, in both our traditional and future-facing commodities, the economy and the government’s budget outcomes will remain exposed to volatile commodity prices, threatening long-term growth.”