Carbon Tax Blip: Australia Resource Exploration Spending Still Rises by 35%

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By Vittorio Hernandez | June 18, 2012 10:16 AM EST

Unveiling of the carbon tax policy in 2011 failed to dampen resource exploration spending in Australia. Treasurer Wayne Swan pointed out that mineral exploration spending in the country rose 35 per cent since then.

For the March quarter, spending went up 12 per cent and hit a record-high of $1.086 billion while investment for resources projects still in the drawing board has reached $500 billion. Mr Swan attributed the continuous flow of money in the resources sector to high demand for minerals especially from Asia.

The treasurer issued the data on Sunday as part of his weekly economic note and barely two weeks before the federal government starts the collection of the $23 per tonne carbon tax which is being blamed for almost everything from rent increases to electricity rate hikes.

"It's yet another reality check for those who try to talk down the outlook for our resources sector or make ridiculous claims that important economic reforms are hurting investment.... Asia's rise will create demand for a lot more than just our iron ore and coal," Mr Swan wrote.

In the past five decades, the share of Asia in the global economy doubled to more than one-third of the world's gross domestic product. Mr Swan forecast Asia's share will grow to 50 per cent by 2030. Asia's former sleeping giant, China, has been Australia's largest market for resources in the past two years.

Public opinion, however, is not in favour of the carbon tax based on the plummeting approval ratings of Prime Minister Julia Gillard. The Australian Labor Party's primary vote declined 1 per cent to 31 per cent, but the Coalition's dropped 2 per cent to 44 per cent, the latest survey said.

In the next four years, the government expects to raise $24.7 billion from the carbon tax which aims to cut greenhouse gas emissions and encourage investments in cleaner forms of energy.

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