Strong mining production and exports - made possible by unprecedented investments - have delivered substantial increases in wages and household income to all Australians over the past decade.
New analysis by the Centre for International Economics (CIE) commissioned by the MCA shows that the continued expansion of mining made Australian households $14,800 better off in 2020.
CIE also estimates that implementing a modest productivity reform agenda would enrich households by $11,673 by 2030 - a benefit similar and additional to the benefits from the ongoing mining boom.
Using a similar method to a landmark 2014 study by Reserve Bank economists, the CIE modelling compares the state of the Australian economy with and without the expansion of mining.
Without the significant expansion of mining this century:
- Australia's economic growth would have been 13 per cent lower in 2020
- Real wages would have been 8 per cent lower in 2020, or $120 a week lower per worker
- Average annual real wage growth between 1998 and 2020 would have been slower (0.47 per cent instead of 0.74 per cent).
In addition, CIE modelled the effects of a 1 per cent a year increase in labour productivity growth resulting from a modest reform program, including a lower corporate tax rate, better regulatory settings for international investment, minor workplace relations improvements and implementation of an industry-focused skills program.
CIE's analysis indicates that if this productivity reform agenda was implemented:
- Real GDP per person would be $9,900 higher
- Real wages growth would double from 2021 to 2030 to 1.7 per cent a year
- Real wages would be 9.4 per cent higher by 2030, or $130 a week higher per worker.
The report was released during Minerals Week, the MCA's annual opportunity to engage with decision makers in Canberra. The three-day event provides a high-profile platform for the executive leadership of Australian mining to discuss, debate and develop the policies that create jobs, support investment and sustain the wellbeing of mining communities and the national economy.
