Mining the age of entitlement

The Australia Institute (TAI) has today released a new report, which has attempted to estimate the amount of industry assistance provided to the mining and energy sectors by Australia’s state governments, via things such as subsidies, concessions and subsidised access to infrastructure. According to the report:

…over a six-year period, state governments in Australia spent $17.6 billion supporting the mineral and fossil fuel industries. Queensland’s assistance was by far the largest of all states, totalling $9.5 billion, followed by Western Australia’s at $6.2 billion…

The coal industry is by far the biggest beneficiary of taxpayer largesse:

And TAI argues that the level of industry assistance granted in Queensland and Western Australia, in particular, are significant when compared against other government programs:

Queensland’s expenditure on these industries in 2013-14 is similar to the amount to be spent on disability services and capital expenditure on hospitals. Queensland will spend as much on supporting the mining industry as it does on supporting some of its most vulnerable citizens. Similarly, industry assistance in Western Australia is substantial when compared to police and health, and in New South Wales, it is comparable to other important budget items such as managing the state’s national parks and providing accommodation for those with disabilities.

Moreover, industry assistance makes up a large proportion of the royalties received by the government from the mining and energy industries:

State expenditure on industry assistance makes up a significant proportion of what states receive through royalties, particularly in the big mining states of Queensland and Western Australia. In 2013- 14 Queensland is planning on spending $1.5 billion on industry assistance, almost 60 per cent of what it will receive in royalties.

TAI believes that state governments’ assistance to the mining and industries reduces their capacity to spend on other areas such as provision of health, education and transport infrastructure.

As expected, the Minerals Council of Australia has hit back at the report, claiming that “the mining industry contributed much to the economy in the form of revenue” and that “Australia Institute reports about the mining sector are routinely riddled with errors, distortions and misstatements”.

TAI’s Richard Denniss responded to this criticism by saying that the paper is “not meant to present an argument for or against government assistance to these industries; however, it should highlight that these industries were beneficiaries of government assistance too, just like other industries”.

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