Minister Ferguson delivers Kevin McCann Lecture on Energy and Resources Law
28 September 2011
L-R: Penelope Crossley; The Hon Martin Ferguson MP; Kevin McCann AM; Professor Gillian Triggs
Minister for Resources and Energy and Minister for Tourism, The Hon Martin Ferguson MP, last night spoke at the Sydney Law School on how resources and energy are at the heart of structural change in Australia's economy and how government policy must support that transition.
In his address, Mr Ferguson first outlined that in 2010 the International Energy Agency predicted that global energy use will rise by 36 percent between 2008 and 2035. Australia will continue to be a significant player in, and beneficiary of, this unfolding story of economic development.
"Total export earnings from Australia's resources and energy exports are forecast to reach A$215 billion this financial year - an increase of 21 percent. The pipeline of planned capital expenditure in minerals and energy projects in Australia stands at a staggering A$430 billion," Mr Ferguson said.
This significant increase in the value, and to a lesser extent, the volume, of energy and commodity exports is bringing about fundamental change in the Australian economy.
"I know there is community concern that strong commodity prices and upward pressure on the dollar is squeezing sectors such as manufacturing and tourism. But we should not forget that the benefits to Australian industry from our resource and energy sectors is about more than just downstream manufacturing.
"Large resources and energy projects also create opportunities for Australian engineers, project managers, transport companies, catering firms, bankers and environmental scientists to name a few. Nor should we forget that the economic development of our Asia Pacific neighbours also offers opportunity for other sectors such as tourism - with China being Australia's biggest growth market.
"Regearing our businesses, outside of resources and energy, to take advantage of these markets is vitally important," Mr Ferguson said.
Declaring himself an optimist Mr Ferguson said he was unprepared to accept that Australia's productivity performance would not improve in future years. He explained that in the past few years there had been significant capital investment using resources in the economy, and to date the increased production from this investment has not been fully reflected in Australia's output figures.
He believes this could be holding productivity figures down, and could in part explain the current productivity paradox of increasing investment accompanying decreasing productivity.
According to Mr Ferguson the role of government includes creating the best environment to support economic growth - to attract investment in capital intensive projects and absorb the pressures resulting from structural adjustment.
As an example of this approach Mr Ferguson mentioned that the government is open to the question of temporary migration, through policy such as the introduction of Enterprise Migration Agreements, to support the pipeline of development.
"This would help ease pressures on labour in the resources and energy sectors but also more broadly in the economy and help ensure mega projects are delivered on time and on budget - and maintain Australia's attractiveness as an investment destination."
Martin Ferguson is an alumnus of the University of Sydney. He was previously President of the Australian Council of Trade Unions after working for the Federated Miscellaneous Workers' Union of Australia. He was elected to Federal Parliament as the Member for Batman in 1996. He served continuously as a Shadow Minister in a broad range of portfolios including Employment and Training, Regional Development, Primary Industries and Transport and Infrastructure, until the election of the Labor Government on 3 December 2007. He was appointed a Member of the Order of Australia in June 1996.
The Kevin McCann Lecture on Energy and Resources Law is a platform for distinguished public figures to address major contemporary debates or deliver major policy speeches in the energy and resources sector, and is part of the law school's Global Energy and Resources Law teaching program.
Kevin McCann AM is currently chairman of Origin Energy Limited, Macquarie Group Limited and Macquarie Bank Limited, a director of BlueScope Steel Limited and the director of the United States Studies Centre at the University of Sydney.
Contact: Jen Waters
Phone: +61 2 9351 0294