The Western Australian 2023-24 Budget underscores the significant contribution the mining and resources sector has made to the economy and demonstrates the state’s commitment to continued growth and development in the sector.
The mining and resources sector drove a $4.2 billion surplus for 2022-23, accounting for 29.5 per cent of government revenue.
The Western Australian 2023-24 State Budget funding announcements included:
- $40 million for the Sustainable Geoscience Investments package to accelerate critical minerals discoveries, assisting the state in meeting the demand for minerals used in technologies such as electric vehicles, energy storage and batteries
- $28.2 million to expand invest and trade initiatives, including establishing a new Invest and Trade Western Australian Hub in Texas to enhance the state’s presence and develop economic opportunities in the Americas
- $136 million to support critical port infrastructure – including technology investments at Southern Ports, and expansion of wharf facilities at the Port of Broome to support the export of mineral sands
- $2 million to continue the LNG Jobs Taskforce for a further two years
- $16.1 million increase in funding for the Exploration Incentive Scheme – a new geophysics co-funded programme that will drive investment into the precompetitive data and greenfield drilling that will discover the mines of the future
- $6.2 million investment in magnetotelluric data acquisition
- A $4 million increase in funding for the Minerals Research Institute of Western Australia
- $3 billion investment in Climate Change and energy storage, with $2.8 billion delivering the Collie Battery, wind power and transmission upgrades across the electricity grid that will help Western Australia decarbonise
- $1.3 million from the Climate Action Fund for four studies to underpin the work of the Heavy Industry Sectoral Emissions Reduction Strategy
- $35 million increase in investment into Strategic Industrial Areas
- $370.9 million for the Westport project
- $3.3m towards Bionic lifting equipment for the Core Libraries at Carlisle and Kalgoorlie, making one of Australia’s greatest data resources more accessible
- $20.7 million to meet increased demand for the Regional Airfare Zone Cap, providing affordable airfares for regional residents
The Western Australian Budget also contains provision for cost recovery as part of the implementation of the new Aboriginal cultural heritage framework.
The surplus is $2.4 billion higher than forecast six months ago, primarily thanks to Western Australia’s strong iron ore sector, with higher than expected commodity prices delivering cost-of-living support for all households and small businesses, a substantial investment in decarbonisation of the state’s main electricity grid, a further record spend on health and mental health, new social housing investment, and further repayment of debt.
The sector’s contribution of $12.7 billion in royalties estimated for 2022-23 was slightly up on 2021-22’s and includes $9.2 billion in iron ore royalties, $1.3 billion in North West Shelf grants from oil and gas projects, $910 million from lithium, and $469 million from gold.
In 2023-24, royalty income from commodities (excluding iron ore) is projected to increase by a further $136 million (or 7.3 per cent), with gold royalties rising by a further $75 million, lithium royalties by $18 million and nickel royalties by $20 million, thanks to a growing demand for electric vehicles. Iron ore royalty income is forecast to account for 83 per cent of total royalty income in 2022-23, and to average around 75 per cent of total royalty income from 2023-24 onwards.
In 2021-22, Australia’s exports of minerals, metals and energy commodities was worth $413 billion and accounted for 69 per cent of total export revenue.
In 2022, Australian minerals contributed an estimated $64 billion in company taxes and royalties, an increase of $21 billion in 2021.
Australian minerals have contributed 21 per cent of Australia’s GDP growth in the last ten years and 32 per cent ($41 billion) of all company tax paid in the nation in 2022.
Chamber of Minerals and Energy (CME) Chief Executive Officer, Rebecca Tomkinson, said that with $148.8 billion of projects underway or in the pipeline, Western Australia’s mining and resources sector continues to play a major role in securing and growing the state’s economic future.
“In handing down their respective budgets, the State and Federal Governments have both highlighted how the strong performance of Western Australia’s mining and resources sector and the associated royalties have flowed back into the economy,” Ms Tomkinson said.
“The budget makes it clear that the significant contribution of our sector has helped the Western Australia Government fund a record $39 billion of investment in education, healthcare, transport and government services over the next four years.”
Ms Tomkinson said CME and its members supported and continued to be invested in the successful implementation of the Aboriginal Cultural Heritage (ACH) Act.
“Our industry supports the principles of cost recovery. It is important to have thorough stakeholder engagement and industry is seeking the opportunity to work with the State Government and key stakeholders to ensure the design of the model for cost recovery meets the objectives of the Act,” Ms Tomkinson said.
CME also welcomes the investment in energy storage, wind power generation and transmission network upgrades on the State’s main electricity grid. Investment in the decarbonisation and augmentation of our electricity networks is a key component of industry’s delivery against net zero commitments and will support growth in hydrogen and critical minerals.
Association of Mining and Exploration Companies (AMEC) Chief Executive Officer, Warren Pearce, said the state budget reflects the strength of the Western Australian mining industry, and the value all West Australians can derive from its success
“To continue this success, Western Australia needs to re-invest in growing our resources sector, and supporting emerging industries that will diversify our economy and drive future growth,” Mr Pearce said.
“And while the state continues to make investments to support economic diversification, most of these funds are focused on infrastructure delivery.”
Mr Pearce said Western Australia needs a more focused approach to diversifying the economy, and one that leverages off the strength of the mining industry, with investment in downstream processing to realise greater value from domestic resources.
“In an increasingly competitive international environment, Western Australia needs to do more to incentivise international investment in value-adding,” Mr Pearce said.
“For the broader state’s mining and exploration industry, practical and meaningful support comes down to some basic factors: ensuring timely approvals and reducing regulatory and cost burden. Delivering on promised streamlining and reducing costs of doing business when industry is buffeted by high inflation is critically important.”
The Mineral Council of Australia (MCA) welcomes the Leader of the Opposition acknowledging the significant contribution the Australian minerals industry made to the nation’s economy and the budget surplus – via exports and tax revenue – in his Budget reply speech.
MCA Chief Executive Officer, Tania Constable, said this contribution, thanks to iron ore, thermal and metallurgical coal, gold, aluminium, alumina, bauxite, copper, nickel, lithium and other minerals which are important for the global transition for net zero emissions, was a key factor in the budget surplus.
“This budget surplus does not have to be a one-off. The predicted fall in mining investment over the coming years can be reversed with the Federal Government ensuring its policies boost productivity and maintain Australia’s international competitiveness as a place to invest,” Ms Constable said.
“As the Australian economy continues to face hurdles, and pressure remains on government spending, the Federal Government must do everything in its power to foster economic growth by nurturing investment.
“To attract a significant proportion of this investment that will create tens of thousands of new regional jobs, business growth and investment should be placed at the centre of government’s policy making.”