Ruling Labor may defeat ‘Trump-lite’ Dutton Down Under

While the cost of living and a housing crisis are the main issues for Australian voters May 3, politicians recognize the need to win over the country’s mining sector that accounts for two-thirds of export earnings. 

Australia has two major political parties, Labor and the more conservative Liberal, though the Liberal Party and National Party have an alliance known as the Coalition. Before the election was called in late March, the two main parties were neck and neck in the polls. 

Liberal Party leader Peter Dutton leaned into the early popularity of U.S. President Donald Trump, a move that has led to him being nicknamed “Trump Lite” or “Temu Trump.” Dutton and the Liberals have slipped in the polls. 

While the Australian Labor Party, led by Prime Minister Anthony Albanese, is leading on a two-party preferred basis, if it can’t win a majority, it will likely look to the Australian Greens for support to form a government. 

The policies proposed by the major political parties present divergent paths for the future of mining, encompassing critical minerals, fossil fuels, Indigenous land rights and environmental considerations. As one of the world’s top producers of iron ore, gold, lithium and coal, Australia’s decisions this election cycle could reverberate through global supply chains.

Labor leads

A Roy Morgan survey from April 14 reported Labor at 55% and the Coalition at 46% on a two-party preferred basis, suggesting Labor could potentially win an increased majority.  

Albanese held his campaign launch in Perth April 13 in a nod to the importance of Western Australia’s resources sector. His Labor government has introduced the “Future Made in Australia” initiative, aiming to bolster domestic manufacturing and processing of critical minerals.  

This plan includes A$22.7 billion (C$20.1 billion) over a decade to support industries such as green hydrogen and solar panel production. A notable component is the provision of tax incentives worth 10% of processing and refining costs for 31 critical minerals, effective from 2028 to 2040.  

Labor says it will balance environmental protection with economic opportunity by streamlining approvals while enforcing strong standards. The government has also approved several new coal and gas projects. This dual-track approach has drawn criticism from environmental groups but Labor defends it for maintaining employment in resource-dependent regions.  

Liberal stance

Dutton launched his campaign in Sydney and promised to be a “friend of the mining and resources sector.” He has warned Labor would shut down mining, particularly if it needs the support of the Greens. 

The Liberal-National Coalition is campaigning on a platform of energy security and economic growth through resource development. It would eliminate what it calls duplicative environmental assessments and increase incentives for greenfield exploration. 

Dutton and Shadow Resources Minister Susan McDonald unveiled the Coalition’s “Plan for a Strong Resources Industry”, which promises to cut red and green tape, and expand the critical minerals list to include uranium, zinc, bauxite, alumina, aluminium, potash, phosphate and tin. It would expand critical mineral partnerships with India, Japan and the United States. 

It strongly advocates for the introduction of nuclear energy, including small modular reactors. Dutton has argued that Australia needs “every tool available” to maintain its energy competitiveness. The Coalition also supports continued coal and gas exports, positioning itself as the party of traditional mining communities.  

Three years of Albanese

The current government has a mixed record when it comes to mining. The Senate in February passed Labor’s 10% tax credit starting July 2027, a popular move with the mining sector. 

“This is the first time any Australian government has put their money where their mouth is for the critical minerals industry,” the Association of Mining and Exploration Companies (Amec) CEO Warren Pearce said. 

“This will stimulate billions in new investment in critical minerals processing, which will be far more valuable than the incentives on offer.”  

However, the Coalition has committed to repeal the 10% tax incentive, with Dutton long maintaining that projects needed to be economically viable on their own. Former WA Nationals leader turned federal Nationals candidate Mia Davies criticized the stance. 

“Good policy deserves support,” she told the ABC on April 15.  

One of the low points of the government’s relationship with miners was the rejection of Regis Resources’ (ASX: RRL) McPhillamys gold mine last year on Aboriginal heritage grounds. 

“That is a really bad message for Australia and the rest of the world,” Minerals Council of Australia (MCA) chair Andrew Michelmore told the Melbourne Mining Club in March. 

Last year, the government introduced the ‘Same Job, Same Pay’ industrial relations legislation, which BHP (NYSE, LSE, ASX: BHP) slammed for hurting costs and productivity by requiring equal wages to inexperienced workers versus colleagues with decades on the job. Even so, the opposition’s Dutton said he wouldn’t repeal the law. 

“I understand the difficulty for some of the companies who are facing already a fairly militant union sector and want reforms, but that’s our position,” he said on April 3. 

Coalition pro-nuclear

The Coalition’s key policy to introduce nuclear energy into Australia’s power mix has been estimated to cost A$331 billion. It’s won the support of the MCA, and BHP says it’s needed for the country to remain globally competitive. 

“That requires affordable, reliable supply of electricity, whilst meeting this long-term ambition of being net zero,” BHP CEO Mike Henry told reporters in February. “Are we supportive of nuclear being part of the mix for consideration? Yes.” 

Fortescue (ASX: FMG) founder and executive chairman Andrew Forrest expressed a different view.“I know young males think nuclear is pretty cool but all I can say is, that’s until they’re educated,” Forrest said April 10 in Perth. “That’s until they’re told it’s not cool, it’s highly expensive to build, it’s almost impossible to take down and its power costs are nothing fancy at all.”  

Environment and Water Minister Tania Plibersek says Labor is still keen to establish a federal environmental protection agency, but rather than duplicating approvals processes, she maintains it would speed up permitting. 

“Our laws are 25 years old. They’re not fit for purpose, they don’t protect the environment, they’re not good for business,” she told the ABC on April 12. “We want better environmental protections and faster, clearer decision making. We can do both, but it’s going to take common sense and compromise.” 

The same day, WA Liberal Senator Michaelia Cash told reporters the policy would have a “devastating” impact on mining projects. 

Incentive threatened

In March’s federal budget, Labor revealed it wouldn’t extend the Junior Minerals Exploration Incentive. 

Amec commissioned a study this year that found the incentive had stimulated A$404 million in greenfield exploration since 2017 at a cost to taxpayers of A$182.2 million in credits. The Coalition vows to reintroduce the incentive and fund it with A$100 million investment. 

“The reinstatement of the incentive is necessary to decrease the risk for junior explorers,” MCA’s Constable said. 

“Australia’s vibrant junior exploration sector plays a crucial role in the mining ecosystem by driving innovation, discovering new mineral deposits and providing the foundation for future large-scale mining operations.”