Minchin Response

To the President of FASTS

Thank you for your letter of 3 April 2000 concerning the economic benefits of exploration activity, publicly funded geoscience information, and geoscience research in Australia.

In my response of 10 May I advised you that I had directed my Department to consider the merits of your proposal to hold an inquiry into the value of the geoscience sector, and to consult with relevant agencies, including ABARE and AGSO.

I understand representatives of FASTS met with Parliamentary Secretary, Mr Warren Entsch, on 11 May to highlight difficulties facing the geoscience sector at present as a result of reduced funding from industry and government. Mr Entsch indicated at that meeting that the Government recognises the contribution geoscientific research has played in the development of the Australian minerals industry, including by AGSO. However, the Government needs to ensure that future geoscience funding is appropriately targeted. The recommendations flowing from out of the Chief Scientist’s Review of Australian Science Capability, and the recommendations being put together by the Implementation Group following the Innovation Summit, will be particularly relevant.

Against this background, I encourage FASTS to take up Mr Entsch’s suggestion and submit funding proposals in consultation with AGSO for activities to be undertaken by AGSO, for consideration by the Government.

As you can see from the attached document, ABARE have outlined recently completed, current and planned research projects which address a substantial number of the areas of concern you have identified. The detailed results of this research can be made available to you by ABARE if you wish. As I have pointed out, the Government recognises the importance of the geoscience sector and remans vigilant on these matters. However, at this stage I believe we are appropriately addressing the situation and providing the required level of public funding within the bounds of fiscal responsibility.

I am aware that State and Territory Geological Surveys have for some time been reliant on specifically funded geoscience sector initiatives to supplement their baseline activities. While such initiatives deliver particular benefits they are, by definition, time limited. Hence it is difficult to plan activities over the longer term. This situation, is now being recognised and I understand that funding is being considered within a broader ongoing budgetary environment. This suggests that all jurisdictions in Australia recognise the value of geoscience and its contribution to the growth of the resources sector.

In these circumstances, therefore, I do not believe it necessary to undertake further studies to demonstrate the economic benefits of geoscientific research.

As you are aware, the downturn in exploration spending is a global phenomenon not confined to Australia. It reflects the downturn in the market cycle affecting resources. It is also worth remembering that the present fall comes off an historical all-time peak in 1996-97.

While the government has no control over the global cycle of demand for minerals, it does strive to improve Australia’s competitiveness as an investment destination through economic reforms, including taxation reform.

Yours sincerely

Nick Minchin