Big miners fume over Labor policy as Federal Budget reveals deficit ahead and $100 billion export plunge

The lobby group representing WA’s biggest players in mining has lambasted “harmful” Federal Government policies as waning commodity prices and a slowing Chinese economy cruel the Federal Budget. Reacting to the Federal Government’s Mid-Year Economic and Fiscal Outlook (MYEFO), Chamber of Minerals and Energy WA chief Rebecca Tomkinson said the likes of industrial relations reforms and Nature Positive legislation were stifling business confidence. It comes as new budget forecasts reveal expected revenue from mining exports could fall by a whopping $100 billion over the next four years. The hit to exports is expected to weigh on the Federal Budget, which is on track for a $26.9b deficit for the 2024 to 2025 financial year. Federal Treasurer Jim Chalmers has pointed the finger at a weaker global economy, but the mining industry argued Labor policy was the problem. “These downgrades must act as a wake-up call for the Commonwealth Government to the substantial challenges confronting WA’s resources sector,” Ms Tomkinson said. “Harmful policy is no longer just a handbrake on the growth of industry – for some commodities it is now an existential threat.” The chief executive said industrial relations changes were to blame. “Disconnecting wage rises from productivity gains and opening the door to widespread industrial action has substantially increased investment risk,” Ms Tomkinson said. “Uncertainty over the future of Nature Positive legislation is also hurting business confidence.” Tax paid by companies was expected to fall by $6.6b in 2024–25 and $8.5b over the forward estimates. Australian Chamber of Commerce and Industry chief Andrew McKellar said the Federal Government needed to step back on public sector spending and reduce red tape burdens on businesses as the way to boost growth. “With revenue from commodities and minerals falling the government needs the private sector to be firing to create more revenue and increase economic growth,” he said. Fortescue’s iron ore chief executive Dino Otranto said the numbers out of Wednesday’s mid-year budget update backed up the case for building a green iron industry in Australia. “While the outlook for mining export earnings has softened, this only reinforces the opportunity for Australia to make our exports more valuable to the rest of the world through producing a green iron product,” he said. “This new industry will insulate Australia further against the economic ups and downs experienced by our trading partners.” Fortescue is building its own green iron plant at Christmas Creek in the Pilbara. It comes after fellow mining majors BHP and Rio Tinto on Tuesday earmarked a site in Kwinana for a low-emissions iron smelting pilot. Both of the company’s iron ore bosses Tim Day and Simon Trott have backed in low carbon iron and steelmaking as a potentially big move forward for the industry. Australian Workers Union WA branch secretary Brad Gandy said he supported the prospect of new jobs and a new industry but questioned why taxpayers were on the hook for it. He said he was “surprised” State Government had given $75 million to the venture given the scale and balance sheets of the likes of BHP and Rio Tinto. Ms Tomkinson said government and private sector funding was needed to cover the $37 billion bill to build the renewables infrastructure the nascent industry demanded. “By producing that green iron, we assist the world to decarbonise,” she said. “We unlock $74 billion worth of economic potential and 20,000 jobs ... we keep future proofing our industry.”