New Australian Government Promises to Re-Boot Mining Boom
September 10, 2013
Under the new leadership of Tony Abbott's Liberal-National Party, Australia is aiming to once again invest heavily in a stalled mining industry. Abbot took office after six years of Labor Party rule and three years of minority government. Australia's economy is struggling to adjust to the end of a mining investment boom as well as slowing government revenues and rising unemployment. However, Abbott's finance spokesman Andrew Robb told Reuters, "The mining boom will be rebooted. We will restore an appetite for risk and investment".
Even with his landslide victory, Abbott does not have a majority in the upper house Senate and analysts say this can present roadblocks to Abbott's plan of cutting carbon and mining taxes. Abbott and his party believe eliminating these taxes is necessary to encourage investment in mining. Australia extracts large quantities of minerals and resources annually including iron ore, nickel, gold, natural gas, coal, oil shale and diamonds.
Australia supplies 342 million metric tons of iron ore (the third largest supplier after China and Brazil), is the second largest producer of gold (after China) and is currently the world's third largest producer of natural gas with forecasts expecting it to be the world leader by 2020.
While Australia has managed to avoid the full brunt of the global recession, enjoying a GDP of 2.6 percent and unemployment at only 5.7 percent, revenues from the decade-long mining boom are dropping steadily. Abbott and his party members believe that the Labor party had discouraged exploration and mining and that the added taxes made it unattractive for investors. Abbott believes that scrapping the unpopular carbon tax will again revitalize the mining industry, create new jobs and restore consumer confidence.