Treasurer Jim Chalmers says net zero ambitions will provide a ‘generational’ opportunity for the country

Mining will ‘underpin” Australia’s economic transformation to a renewable energy superpower in a generational opportunity for the country, Treasurer Jim Chalmers has declared.

Mining is critical to the future of Australia and will “underpin” efforts to transform the country into a renewable energy superpower, Treasurer Jim Chalmers has declared.

Addressing industry leaders at the final day of the World Mining Congress in Brisbane on Thursday, Dr Chalmers said the country does not have to choose between its mining industry and net zero ambitions.

“The role of critical minerals in driving us towards net zero is a generational, defining opportunity for our country, for our state, and for your sector – One we cannot afford to miss.” he said.

“So much of our national success will be determined by our state’s capacity to capitalise on the transformation to cleaner, cheaper energy.”

Federal Treasurer Jim Chalmers said mining was “critical” to Australia’s future. Picture: Dan Peled / NCA NewsWire

Outlining his vision for rare earth minerals to sit at the forefront of Australia’s next mining boom, Dr Chalmers said a successful energy transformation will be built on a strong resources sector.

He told attendees Australia, already the world’s fourth largest rare earth producer, stood ready to play an increasing role in the global market for the materials – critical to the production of renewable energy.

But he said his vision saw Australia going beyond extracting and exporting resources, with the Labour government investing heavily to increase capacity to refine, process and manufacture locally.

“Without Australian mining, our ambition to become a renewable energy superpower will be impossible to achieve … we won’t play the role that we can and should, in the new global economy,” he said.

“The way ahead is to work together.”

Dr Chalmers called for more foreign investment in the resource sector, to help supply chains diversify and avoid the pitfalls of a concentrated global market – pointing to shocks felt during the pandemic and Russia’s invasion of Ukraine.

Federal Treasurer Jim Chalmers said the government was investing more than $2.5 billion in critical minerals projects. Picture: Dan Peled / NCA NewsWire

China currently dominates the processing of rare earths, which Dr Chalmers said “isn’t going to lead to the strong, secure supply chains that we need”.

When price and supply become hostage to geopolitical competition, conflict, or circumstance – The results are severe for our people, our businesses, and our economies,” he said.

“If critical minerals are going to create the opportunities that they should for the global community, we’ve got to address it.”

Earlier on Thursday, The Treasurer said the signs are there for a brief reprieve from interest rate hikes.

With the RBA set to make its next interest rate decision next week, there is broad hope the better-than-expected inflation figures could mean the central bank can leave rates steady at 4.1 per cent.

New figures on Wednesday revealed inflation decreased by 1.2 per cent to 5.6 per cent in the year to May, led by decreasing petrol prices.

Those numbers were well below the December high of 8.4 per cent.

Dr Chalmers said he wouldn’t pre-empt or second guess any decisions, but noted the RBA would be “weighing up the fact that inflation is moderating in our economy”.

“The economy is slowing, partly because of a global slowdown. We’ve seen a softening in retail and consumption and household savings and construction approvals,” he told ABC News.

“They will weigh all that, but come to the decision independently.”

The RBA board will hand down its next interest rate decision next week. Picture: NCA NewsWire / Martin Ollman

Pressed further on ABC Radio, Dr Chalmers said there was “clear evidence” the economy was slowing in ways that had been expected and anticipated.

“They’ll weigh that up, along with all of the global conditions as well. But I’m not going to change my usual practice, I’m not going to give free advice,” he said.

“I’ve got my own job to do and I take responsibility for doing that.”

He said his job was to “build a buffer” in the budget.

“Which we’re doing with the bigger surplus. It’s to take the edge off the cost of living pressures without adding to inflation – we’re doing that.,” he told ABC News.

“We’re investing in the future of the economy.”

Dr Chalmers said the better-than-expected budget surplus wouldn’t mean more immediate cost of living relief packages, but hold the economy in better stead for the years ahead. Picture: NCA NewsWire / Jeremy Piper

Earlier this week Dr Chalmers confirmed the $4.2 billion surplus predicted in the May budget would be even bigger – with the full figure to be released in coming weeks.

Dr Chalmers said despite the larger surplus he wasn’t “floating” any new cost of living measures, but denied the bigger than expected surplus would come at the expense of people “doing it tough”.

“From the better foundation we can afford to help people doing it tough, and invest in the future as well,” he told ABC News.

“We’re already rolling out cost of living help, a fair chunk of that is rolling out in the coming weeks.

“Obviously down the track if we need to contemplate doing more, or doing different things in subsequent budgets, we obviously take into consideration the economic conditions and the condition of the budget at the time.”

Various cost of living measures will roll out in the coming weeks, including cheaper childcare, and discounted electricity prices for some people.

Originally published as Treasurer Jim Chalmers says net zero ambitions will provide a ‘generational’ opportunity for the country