MARKETS

Prices down, but taxing times remain for miners

NEW estimates by Deloitte Access Economics show the mining sector's contribution from company tax...

Noel Dyson
Prices down, but taxing times remain for miners

This is $18.3 billion in 2012-13 and $21.9 billion in 2013-14.

These figures exclude the minerals resource rent tax and the carbon tax.

While the carbon tax has gone, the MRRT remains due to Senate intransigence.

Deloitte also confirms a record tax and royalty payment of almost $24.5 billion by miners in 2011-12.

Despite commodity prices falling by as much as 50% since 2011, the large contribution to federal and state coffers puts to bed claims the mining industry is not paying its “fair share”

Minerals Council of Australia chief executive Brendan Pearson said the figures also showed the MRRT, which started on July 1, 2012, was not needed for all Australians to share in the mining boom.

Mining, which directly accounts for about 10% of GDP, pays almost 25% of company tax in Australia, compared to 8% a decade ago.

The combination of Australia’s relatively high company tax rate plus royalties makes the country a relatively high minerals tax minerals province even without the MRRT.

“Notwithstanding weaker commodity prices and squeezed margins over the past three years, miners continue to deliver an extraordinary dividend to Australian governments,” Pearson said.

“The ramping up of production and export volumes, the product of record new investment in the industry in recent years, is helping to underpin mining’s tax contribution.

“This is in addition to the wider economic return from higher incomes, massive investment and stronger communities that mining has delivered.

“These numbers comprehensively puncture the wall of sound from the Greens and some commentators determined to talk down mining’s contribution to Australian living standards.

“The mining industry tax contribution sits beside the more than $30 billion the industry spends annually on community projects and local businesses.”

Pearson warned that this could not be taken for granted.

“It is time to move on from the notion that there are easy gains from ever higher taxes on mining,” he said.

“The challenge today is to improve productivity and competitiveness and to restore confidence in Australia as a premier destination for mining investment.

“That is why the senate should move as quickly as possible to repeal the MRRT.

“This will not only get rid of an unnecessary burden on many coal and iron ore companies, it will also signal that Australia is determined to hold its place as a stable and competitive supplier of mineral resources to the world.”

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production