Growth heading for cliff in Australia, says Chaney

Chairman of National Australia Bank Michael Chaney says Australia is likely to fall off a “growth cliff” when the resources investment boom ends in the next few years because the economy is not becoming more productive, according to the Australian Financial Review.

Economic growth was likely to slow to less than 2.5% after 2015 because of burdens on business, including overlapping state and federal environmental regulations, and Labor’s industrial relations system, which made the workplace less flexible.

Chaney’s warning is particularly significant because Woodside will soon make a decision on whether to build the $40 billion Browse gas project at James Price Point in Western Australia.

Higher iron ore price tipped before mining tax paid

The minerals resource rent tax is unlikely to be paid until the iron ore price rebounds to about $US140 a tonne, in part due to rising offsets from state royalty payments, under modelling conducted by PwC, according to the Australian Financial Review.

The model, based on an Australian dollar at parity with the US dollar, is a hypothetical one based on a small iron ore producer and not applicable to individual projects.

A source familiar with major miners said it was likely to need a price of at least $US130 a tonne before the tax hit companies such as Rio Tinto and BHP Billiton. The actual figure would also dependend on the value of the local currency.

Project costs must be better controlled, says Ferguson

Increasing cost blowouts at Australia's major resources projects could dent future investment in the once booming sector, Resources Minister Martin Ferguson has warned, blaming government and industry for not better managing escalating costs, according to The Australian.

Ferguson said yesterday that continual cost blowouts made it difficult to attract further investment.