Age of entitlement has not ended for fossil fuels

A new report from The Australia Institute exposes the massive scale of state government assistance, totalling $17.6 billion over a six-year period, not including significant Federal government support and subsidies.  
Queensland taxpayers are providing the greatest assistance by far with a total of $9.5 billion, followed by Western Australia at $6.2 billion.
State Subsidies Final
The table (above) shows almost $18 billion dollars has been spent over the past 6 years by state governments, supporting some of Australia’s biggest, most profitable industries, which are sending most of the profits offshore.
That’s $18 billion dollars that could have gone to vital public services such as hospitals, schools and emergency services.
State governments are usually associated with the provision of essential services like health and education so it will shock taxpayers to learn of the massive scale of government handouts to the minerals and fossil fuel industries.
This report shows that Australian taxpayers have been misled about the costs and benefits of this industry, which we can now see are grossly disproportionate.
Each state provides millions of dollars’ worth of assistance to the mining industry every year, with the big mining states of Queensland and Western Australia routinely spending over one billion dollars in assistance annually.
These subsidies demonstrate that the economic argument for these industries is fundamentally flawed – Australian taxpayers are funding mining at the expense of crucial public services like education, health and police.
Our research found alarming comparisons between the massive funding and assistance provided to the mining industry compared with that allocated to essential services such as health, education and police.
Queensland will spend as much supporting the mining industry as it does supporting some of its most vulnerable citizens. Government funding and assistance provided to the minerals and fossil fuel industries in Queensland in 2013-14 is similar to the amount spent on disability services and capital expenditure on hospitals.
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 or investing in accommodation for those with disabilities.
Supporters of Australia’s mineral and fossil fuel industries argue that they provide value in royalties, jobs and economic prosperity but our research exposes these claims as fundamentally flawed.
In fact, states repay much of what they receive in royalties back to these industries in the form of assistance and funding, particularly in the big mining states of Queensland and Western Australia.
In 2013-14 Queensland planned to spend $1.5 billion on industry assistance, which is almost 60 per cent of what it will receive in royalties.
The argument that these projects benefit Australia is flawed. The Reserve Bank of Australia has said much of the benefits and profits of mining expansion are going offshore, with estimates suggesting foreign interests effectively own four fifths of Australian mining operations.
This report lays bare the massive extent to which big miners are being subsidised by the Australian taxpayer while the profits from the exploitation of Australian minerals is largely being shipped offshore,” Dr Denniss said.
 Over the past 6 years, state mining subsidies could have delivered:
 ·       Queensland: $9.5 billion, or 9 major hospitals
·       Western Australia: $6.2 billion or 52 new airport terminals
·       New South Wales: $872 million or 116 new schools
·       Northern Territory: $407 million or 799 doctors
·       South Australia: $316 million or 620 nurses
·       Victoria: $206 million or 377 police
·       Tasmania: $54 million or 116 teachers
Richard Dennis is director of The Australia Institute. This article was derived from the report, “Mining the Age of Entitlement.”


14 responses to “Age of entitlement has not ended for fossil fuels”

  1. Pedro Avatar

    So it would appear that both sides of politics is in on the great mining scam of the ATO. Won’t hear anything about it in the Murdoch press!

  2. Alan Baird Avatar
    Alan Baird

    No indeed Pedro. If anything, acclamation. The ALP has a long and dirty history in this area. Marn Ferson, for example, was clapped enthusiastically by Libs AND Labs for good reason on his departure. He was well inside the conservative tent. M. Newman would have loved him. Good riddance.

  3. michael Avatar

    that can’t possibly a net figure, including the revenue of royalties, native title, corporate and payroll tax coming back the other way.
    At any rate, aren’t all the people who are ‘left’ and pro renewables all about subsidies when justified? if that is the total spent by governements across australia over 6 years for the return in revenues generated by the industry, that’s a wonderfully good investment

    1. Pedro Avatar

      I guess we would have to see what the total revenue from royalties, corporate and payroll tax is coming back in over that period is. I wonder what impact it would have on mining sector royalties, tax etc if there was no mining sector welfare?

      The other big issue is why the hell should tax payers be paying/subsidizing already profitable mining multinationals to extract resources that essentially belong to Australia depleting non renewable resources that future generations may not have the benefit of?? It is like paying a robber to steal your car and then having your car licence revoked for the rest of your life.

  4. Arch@M32 Avatar

    “Mark Parnell MLC:
    I should have mentioned that this is ONLY State & Territory subsidies, NOT Federal, so doesn’t include diesel fuel rebates, tax concessions and other direct Federal subsidies.”

    1. michael Avatar

      on the even the figures provided in their own report it shows how shallow the analysis is. Take WA, figure 8 puts subsidy at $1.4B and revenue from this same industry at $5.8B… a $4.4B dollar return on that subsidy (investment). where would that $4.4B come from otherwise? let’s not get started on that fact they are including spending on something like port infrastructure as a one off subsidy, instead of the state building an asset which the industry then pays to use in the future and will generate very large returns. yep, this one was just a paper trying to get a reaction.

  5. juxx0r Avatar

    Those numbers are dodgy as, just went through them.

    1. Colin Avatar

      Care to provide some proof of that assertion juxx0r?

      Or are you just trolling?

      Just curious.

      1. juxx0r Avatar

        No, they’re there for all all to see. Check em out yourself.

        1. David Osmond Avatar
          David Osmond

          Care to clarify if you mean dodgy as in “crazy the State Government is providing all those subsidies”, or dodgy as in “The Australian Institute’s figures on subsidies are dodgy”?

          1. juxx0r Avatar

            Dodgy as, as in didn’t know of any mining operations on the Kwinana freeway etc.

          2. aussiearnie Avatar

            Just had a look at the methodology and the numbers too. So you are dismissing the whole report on the understanding that a 0.6m petroleum related subsidy for a freight management system on the Kwinana Freeway is not related to a mining project?

            The figures in this report come from the budget papers of the State Governments and the methodology is explained in detail. Pretty thorough and transparent in my view.

          3. michael Avatar

            $3B spend on QR is treated as a subsidy prior to sale… interesting logic. WA spending on port a subsidy… interesting logic. NSW in FY13-14, $134M assistance against $1.5B in royalties… this is bad? that’s not even taking into account the taxes on top of royalties. what an indeed shoddy piece of work.

  6. juxx0r Avatar

    Industry group slams anti-mining think tank
    Blair Price

    Monday, 15 September 2014

    THE New South Wales Minerals Council has slammed the Australia Institute for its “fraudulent” claim that the mining industry receives $A17.6 billion in government subsidies.

    Stephen Galilee

    The claim, made in Australia Institute’s Mining the age of entitlement report released in June, was taken apart by Castalia Strategic Advisors managing director and former NSW treasury secretary Michael Schur.

    He found that the Australia Institute grossly exaggerated the level of subsidy to the mining and resources sector and conducted “fundamentally flawed” analysis of state and territory budgets with government subsidies “amounting to no more than a few percentage points of the $17.6 billion claimed by the institute”.

    “The Australia Institute has been clearly caught attempting a massive economic fraud to attack the mining industry,” NSWMC CEO Stephen Galilee said.

    “This should confirm once and for all that the Australia Institute is an anti­mining campaign organisation masquerading as a think tank.

    “The revelation of this $17 billion fraud means that the economic credibility of the Australia Institute is now in tatters.”

    “The Australia Institute should now apologise to the hard working miners of NSW and their families for campaigning against their jobs, and drop once and for all their attempts to put working people into unemployment.”

    Schur also had some words for the left-leaning organisation.

    “Shining a spotlight on corporate welfare is a good thing, Australia can ill­afford it,” he said, with his full report available on the NSWMC website.

    “However, the Australia Institute’s claims are based on a flawed analytical framework and are in the main unfounded.”

    The Australia Institute has not yet responded to the NSWMC/Schur claims on its website.

    The Australian Greens party-linked think tank was founded by environmental economist Clive Hamilton.

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