Reply to Minchin

Dear Minister

Economic Benefits of exploration activity, publicly funded geoscience information, and publicly funded geoscience research in Australia

Thank you for your letter of 7 June 2000, in response to our proposal for an analysis of the economic benefits of exploration activity, publicly funded geoscience information, and publicly funded geoscience research in Australia. We appreciate your considered reply.

We have now had an opportunity to examine the references provided by ABARE, as an attachment to your letter, and are somewhat puzzled by the arguments for not undertaking even some of the studies we proposed.

Firstly we never proposed, as stated in your letter, that an inquiry be held ‘into the value of the geoscience sector’. There is clearly no need for this because the statistics on the value of the Mineral and Energy Resource Sector to the Australian economy are readily available and compiled on a regular basis.

What are not available are statistics on the value of:

· The geoscience information provided by the Commonwealth and the States/NT, primarily through their geological surveys, primarily to encourage mineral & petroleum exploration,

· Mineral & petroleum exploration activity, per se, in the context of the value of future discoveries, the flow-on effects in regional Australia, and eventual returns to governments, and

· Publicly funded geoscience research in the context of encouraging our resource and service industries to generate wealth for the nation.

The list of ABARE papers you provided basically focuses on exploration trends and links between exploration activity and commodity prices. The papers do not analyse the value of exploration per se, or the value of the publicly funded geoscience outputs.

In fact, in ABARE Conference Paper 99.23, it is stated:

‘There is reasonable evidence that release of geoscientific data influences the location of subsequent exploration (Cramsie & Gilligan, 1997), although the evidence that it has a strong influence on Australia’s total level of exploration is less compelling. The importance of providing low cost, high quality, precompetitive exploration data relative to that of other drivers of exploration, such as minerals price expectations and the associated availability of funds for exploration has not been examined in detail.’

In other words there appears to be no hard analysis on this issue.

Given this situation, it is not clear to us what criteria are being used to support your statement that ‘we are appropriately addressing the situation and providing the required level of public funding within the bounds of fiscal responsibility.’

In view of the importance of the Mineral & Petroleum resource industries to the wealth and wellbeing of Australia, and the lack of good statistics on several key parameters that impact on public sector R&D investment, we strongly urge that at least you include in your department’s work program a study of the value of the precompetitive geoscience information produced by the States/NT and the Commonwealth.

It may be worthwhile to have the name and contact details of the officer responsible for this issue in your department so that we can take the matter further if any clarification is required.

Yours sincerely

Sue S