Mining boom 'not universally beneficial'

Australia's mining boom has not been universally beneficial for the nation as other sectors of the economy are squeezed by higher labor and materials costs, a new report says.

The Australia Institute has released a paper, Mining the Truth - The Rhetoric and Reality of the Commodities Boom, to highlight some of the negatives as well as the positives of the boom.

The benefits of the mining industry had been a "mixed blessing" for the economy overall despite Australia receiving a surge in national income, report authors David Richardson and Richard Denniss said on Thursday.

"Strong world demand for Australia's minerals have driven up the exchange rate which, in turn, has reduced world demand for our manufactured and agricultural goods as well as for our tourism and education export services," the report said.

Australia's dollar has traded above $US1 for most of 2011 due to demand for the nation's resources, particularly iron ore and coal, and a weak US dollar.

The currency is trading around 45 per cent higher than its long-term average between December 1983 and August 2008.

The mining boom has also lifted the costs of skilled labour in other sectors, increasing the prices of materials used in mining and raising the costs of services such as construction.

Australian Greens leader Bob Brown said the mining boom had squeezed other sectors, much to the harm of farmers, manufacturers, teachers and hospitality workers.

Senator Brown said the report highlighted the need to reconsider the minerals resources rent tax (MRRT) so the nation could derive more benefits from the mining boom.

The federal government has proposed to tax at 30 per cent the "super profits" from coal and iron ore mining from July 1, 2012.

"The Greens will move to expand the MRRT, oppose the tax cut for big business while supporting tax relief for small businesses, and push to set up a sovereign wealth fund," he said on Thursday.

"This is the economically responsible thing to do."

Authors: mining - Yahoo! News Search Results