mozgrame said:
Here is an interesting article. Be sure to read it through to the end.
Mining industry receives billions of dollars in state subsidies: report
AM By Simon Frazer, Rachael Brown and staff
Updated 24 Jun 2014, 4:34pmTue 24 Jun 2014, 4:34pm
The astounding profitability of mining has helped drive Australia's prosperity over the past decade, but a report released today shows the sector has also been a major recipient of state government largesse.
While the states' coffers are boosted by royalties, analysis by the Australia Institute think tank shows that, in some cases, well over half of that money is handed straight back through direct and indirect grants.
The Australia Institute has pored over the past six budgets from each state and territory, finding at least $17.6 billion worth of assistance for the mining sector.
<snip>
http://www.abc.net.au/news/2014-06-24/mining-industry-receives-billions-of-dollars-in-state-subsidies/5545714
The AI have been trying this tact for a few years now, without understanding what the actual assistance means, or why it's applied (and if they know, they conveniently fail to make the point in their releases).
To punch some holes in the basics of their data;
◾$3.6 billion (about 20 per cent) isn’t associated with the mining and resources sector and “appear(s) to have been incorrectly categorised”.
◾$3.7 billion (about 21 per cent) is general government expenditure “socialised across all sectors of the economy or subject to fees and charges” and therefore “there isn’t any explicit or inherent subsidy”.
◾$10.3 billion (about 59 per cent) is government investment in infrastructure/services via Public Trading Enterprises which are legally bound to charge commercial rates for their use. The cost of industry’s use is therefore “fully recoverable” and “there is no subsidy”.
◾On the Australia Institute’s claim that government funds invested in Public Trading Enterprises could be better spent on government services such as health and education, the report explains that each is supported by separate funding sources and “capital expenditure in one sector is not at the expense of capital expenditure in the other sector” and that “far from being a major receiver of State funds, the mining and resources sector is actually a substantial source of State and Territory revenues”.
There are no doubt some subsidies provided to mining, that are not warranted. But the AI's aggressive overreach on the subject leaves them looking stupid, once the broader facts are applied. Perhaps if they stuck to the basics (and perhaps got somebody with some actual knowledge on the finances involved), we'd have a decent discussion on this matter.
As it is, the monies stated are simply not true.