Tuesday, 1 July 2014

The Real Age of Entitlement: State governments spent $17.6 billion supporting mineral & fossil fuel industries between 2008-2014 and Australian Government intends spending more than $40 billion over three years supporting fossil fuel industry

Supporters of the minerals and fossil fuel industries, like Queensland Premier Campbell Newman and the New South Wales Minerals Council, regularly emphasise the money that these industries pay to state governments. Much less is said about the money that state governments pay to assist these industries.

State government assistance to the minerals and fossil fuel industries is considerable.
Based on an analysis of state government budget papers, we estimate that a total of almost $18 billion has been contributed by the taxpayer over the last six budgets.

This assistance takes many forms. Sometimes it is a direct cash payment. For example, the New South Wales government gave multinational coal companies $10 million in 2009 as an ‘assistance package’. Other times it comes in the form of discounted access to services provided by the state and its businesses – Queensland has provided the coal industry with ‘concessions’ on access to rail services worth over $1 billion between 2012-13 and 2013-14.

Often assistance comes in the form of infrastructure or projects that wholly or partly benefit the minerals and fossil fuel industries. Sometimes this expenditure brings a financial return, as in the case of Western Australia’s hundreds of millions of dollars spent on developing port infrastructure. Sometimes it doesn’t – the New South Wales government is unlikely to see any return on its $76 million expenditure on the Cobbora Coal project…..

At the federal level, The Australia Institute publishes an annual study on subsidies of the mining industry, which totalled $4.5 billion in 2013, up from $4.0 billion in 2012.
Other organisations publish estimates of subsidies provided to fossil fuel use and production, which also focus largely on assistance at a federal level….

...the loss to the New South Wales government relating to the treatment of the Coal Research Levy.
This levy for $0.05 per tonne of coal mined is fully deductable from royalties that coal miners pay to the New South Wales government for the rights to mine the state’s coal. This deduction is effectively a subsidy of millions of dollars per year from the New South Wales government to the Australian Coal Association Research Program….

The assessment concludes that the Australian Government is set to spend over 
$40 billion (see Table on page 4) in the form of tax rebates and concessions,
foregone revenue and expedited write downs of assets per year from 2013/14 to 
This assessment only includes tax measures, and does not include direct grants or 
State Government measures, which could add billions more to the annual totals.


Australian Productivity Commission, Trade & Assistance Review 2012-13:

1 comment:

Scott said...

The Productivity Commission has debunked the myth around ‘government assistance’ to the mining industry.

In its annual Trade and Assistance Review released in June last year, the Productivity Commission found the effective rate of government assistance to the mining industry in Australia is ‘negligible’.

It's time the Australia Institute was recognised for what it is - an anti-mining pseudo-political organisation dressed up as a think-tank.