Australia’s carbon tax and a levy on mining company profits hasn’t stopped a surge in investment in the resources industry, Treasurer Wayne Swan said.
“While there have been no end to the irresponsible claims made about the impact of both a price on carbon pollution and the new resource tax arrangements, the investment figures tell the real story,” Swan said in an economic note yesterday. “Far from putting a wrecking ball through the economy, investment has actually skyrocketed since these policies were announced.”
Australia has about A$260 billion ($271 billion) of projects at an advanced stage, and the investment pipeline has increased about A$90 billion in the past year, Swan said. The government began taxing carbon emissions on July 1 along with new levies on iron ore and coal mining profits.
The Reserve Bank of Australia this month raised its forecast for economic growth in 2012 citing consumer demand and the continuing demand from emerging nations including China and India for iron ore, coal and natural gas.
“Resource investment is expected to decline gradually in the latter part of the forecast period,” the RBA said in its quarterly monetary policy statement on Aug. 10. “The effect of this on GDP growth is expected to be roughly offset by faster growth in resource exports.”
The pipeline of investment projects “provides a rock-solid foundation for the economy in the face of continuing global turbulence,” Swan said.
Australia is increasingly viewed as a “new safe haven,” he said. “As a capital-hungry nation, our reputation as an attractive investment destination is critical.”
The opposition Liberal-National coalition, favorites to win elections due next year, will get rid of taxes that stand in the way of projects such as the Olympic Dam copper-uranium-gold mine expansion in South Australia, leader Tony Abbott said Aug. 18. In March, he described the carbon tax as a “wrecking ball” for the economy.
Primary support for the ruling Labor party stood at 33 percent compared to 45 percent for the opposition, according to a Newspoll published in the Australian newspaper Aug. 7. On a two-party preferred basis, which takes into account the country’s preferential voting system, Labor would lose elections due next year with 46 percent to the opposition’s 54 percent.
BHP Billiton Ltd., the world’s biggest mining company, will delay approval of the $33 billion Olympic Dam mine expansion for two years until 2014 because of falling commodity prices, the Australian newspaper reported July 28, citing a document prepared by an unidentified consultancy with knowledge from BHP staff. The Melbourne-based company is also due to decide on an iron-ore port expansion in Western Australia by the end of this year.