Productivity Commission rejects mining subsidy claims

Today’s release of the Productivity Commission’s Trade and Assistance Review 2018-19 repudiates the claim that Australian mining is subsidised.

The report states that tariff and budgetary assistance to mining is ‘disproportionately small’.

The Productivity Commission estimates that the effective rate of assistance for mining – the ratio of total assistance to output – was just 0.2 per cent in 2018-19, the same low rate as the last three years.

The report shows that in 2018-19, Australian mining incurred a net tariff penalty of $55 million because of tariffs imposed on imported inputs into mining production.

The commission also notes that budgetary assistance to mining has declined.

Three-quarters of budgetary assistance attributed to mining consists of R&D tax incentive offsets, which are available to all industries.

The mining industry underpins Australia’s economic prosperity, pays its fair share of tax and royalties with annual contributions of $31 billion and provides more than 240,000 highly skilled highly paid jobs, which contribute to strong and sustainable regional communities. The industry is also providing much-needed export revenue.

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