Statement 4:
Benefiting from our Mineral Resources:
Opportunities, Challenges and Policy Settings
(Continued)
Conclusion
Australia has come through the global financial crisis in a strong position, with economic policy again facing the pre‑crisis challenges of managing an economy returning to normal levels of capacity utilisation capacity and an elevated and rising terms of trade.
Reaping the national income benefits in this environment requires the flexible and efficient allocation of labour and capital. With the increased prices received for Australia's mineral resources likely to be sustained for some time, this will entail a higher proportion of workers and investment moving to the mining sector and related parts of the economy. This may see different industries and regions grow at different speeds.
Fiscal policy is also critical, with the need to increase productive capacity, including through encouraging business investment, but without adding further to inflationary pressures in the economy. More responsive and better planned skills training and infrastructure will make the enhanced investment in these areas more effective in expanding capacity, while the reduction in the company income tax rate will help all sectors of the economy to grow. Together with the achievement of the medium‑term fiscal strategy, this will provide a sound foundation for sustainable growth and the enhancement of the wellbeing of all Australians over the long term.
In this way, it is possible to avoid the 'resource curse', where the benefits of resource wealth are lost due to poor policy and institutional frameworks. Tax reform that better charges for the use of Australia's mineral resources will increase national income, and allow a better distribution of the benefits of resource wealth across the community.
If www.budget.gov.au responds slowly or you are having trouble downloading a document, try one of the Budget Website Mirrors
Note: Where possible, Budget documents are available in HTML and for downloading in Portable Document Format(PDF). If you require further information on any of the tables or charts on this website, please contact The Treasury.
