The Federal Government cannot pin its deteriorating budget position on the mining industry.
Recent forecasts from the Resources and Energy Quarterly (REQ) paint a far more optimistic picture of the sector's export volumes than the Treasurer's explanation for revenue downgrades in MYEFO, which predict an $8.5 billion decline in tax receipts from mining over the forward estimates.
This inconsistency demands urgent clarification in a Budget context as it creates uncertainty for the mining industry and undermines confidence in the broader economic narrative.
The government's unverified assumption that tax receipts from mining will fall by $8.5 billion over the forward estimates owing to lower export volumes cannot be singled out as a reason for the government's $27 billion deficit - a deficit fuelled by rapidly escalating government spending.
There is a worrying pattern here. The government is often mute when it comes to the enormous tax contribution made by the mining sector and the benefits that flow to all Australians, yet remarkably quick to scapegoat the industry when the Federal Budget comes under pressure.
Let's be clear: in 2022-23, Australia's minerals sector delivered record company tax and royalties, contributing a staggering $74 billion to federal, state, and territory governments - $9.3 billion more than the previous year. Over the past decade, the industry has contributed $356.6 billion in company tax and royalties, revenue that underpins critical services like hospitals, schools, and infrastructure across the country.
Yet the introduction of this Government's restrictive policies has only raised the costs facing Australian businesses, forcing mining companies to drive efficiencies harder and contributing to devastating decisions to mothball, delay, or close operations in the face of fierce international competition.
The mining industry remains resilient, but it is under pressure from a weakening global economy, uncertain demand from key partners, and domestic policies that deter growth.
Not only has the government failed to curb runaway spending and lock in a decade of deficits, but they have done nothing to improve broad-based investment conditions, putting at risk future investment in the nation's most productive sectors.
Just as Australia's miners have had to make difficult decisions to safeguard the health of company balance sheets this year, Australians rightly expect the Government to make tough decisions to manage the health of the nation's balance sheet. That includes addressing immediate cost-of-living needs, but also implementing a credible plan to safeguard Australia's financial future.
If the Government wants to secure the revenue it needs to balance future budgets, it must stop tying the hands of Australian industry.
The solution for the Government should be obvious. Australia must attract more mining investment, not drive it away. Governments need to focus on productivity-enhancing policies that create jobs, boost economic growth, and make the nation more resilient to global volatility.
Without a pipeline of new investment across both traditional and future-facing commodities, Australia's economy and future budgets will remain exposed to volatile commodity markets.
Australia's miners are doing their part. It's time for the Government to do theirs.
