It’s the “boom” that just won’t die. From BS:
A second mining investment boom could hit the Australian economy if there’s a change of government, Opposition Leader Tony Abbott says.
He says the Labor government has helped “kill” the mining boom by implementing the mining and carbon taxes.
“I think the mining boom could only come again under a government which gets it … which abolishes all these other unnecessary taxes.”
This is just plain wrong. How did a mining tax that collects no revenue and carbon tax that collects marginal revenue kill the mining boom? Answer: they didn’t. It died because underlying prices fell as China shifted its growth patterns in ways that were a surprise to authorities and miners (but not MB). There is now massive over-capacity in the bulk commodities.
Not only that, the only area where more investment is at all likely is LNG. Yet Abbott has committed to keeping the MRRT/PRRT extension to terrestrial gas developments. He’s the big, fat tax man too.
Now, that is not to say that the falling costs – dollar and wages – that have accompanied the bust to date won’t stimulate some more investment on the way down. The AFR reported some rhetoric from Chevron on that basis this morning, though I remain skeptical given the accelerating threat from US exports.
But that’s why Australia needs to engineer a real depreciation – in the dollar and in wages – which is strangely absent from Tony Abbott’s rhetoric and policies.
