In short, the validity of the “negligible” assessment – which comes from the Productivity Commission – depends on who you ask.

Parts of the mining industry and government seem to back the judgement but left-leaning researchers and economists have their own opinions.

“I would disagree with the notion that mining is a low subsidised industry,” The Australia Institute senior economist Matt Grudnoff told MiningNews.net.

“The PC measures subsidies in a particular way and they don’t take into account things like tax concessions as a subsidy.

“They do mainly in the sense of research and development but outside that they don’t include tax concessions at all.”

Like most things with a political and economic tinge, debate over mining subsidies is not clear-cut.

And while the PC’s claim has been latched onto by the Minerals Council it is still hotly contested by some economists.

Diesel fuel rebate debate

Front and centre in the debate is the diesel fuel rebate scheme.

The policy, which allows companies to claim a lower tax rate for fuels, costs the budget around $A6 billion a year.

Miners are by far the biggest users of the credits and the industry claimed around $2 billion last financial year.

On one side there is the strong argument that the rebate is not a handout, with Treasury itself backing this view.

The argument claims that because diesel is a business input it should be deductible for tax purposes, just like electricity or wages.

It also claims diesel should be deductible for miners because they use the fuel on their own roads but that point is contested by Grudnoff.

“That argument assumes the tax on diesel is for the construction of roads and that’s not the case,” he said.

“A link between the amount of tax collected on fuel and the construction of roads did exist but was broken in the late 1950s.

“For over 60 years the tax levied on fuel, whether it’s diesel or unleaded or whatever, all goes into general revenue.

“Funding for roads comes out of general revenue the same way all government payments do.”

Grudnoff said while the rebates were available to a range of industries, some sectors that also used diesel as an input weren’t able to make the claims.

He said based on those arguments fuel rebates were a handout but for now, at least, the battle lines on this front remain drawn.

A wider view

While there’s still furious debate over fuel tax credits, there are plenty of mining subsidies that aren’t argued about.

Overall the PC’s latest review found $700.4 million was dished out to miners last year in the form of government assistance, with research and development grants forming a large portion of the spending.

Indeed, some smaller miners saw R&D grants contribute the lion’s share of their net profit figures.

Along with R&D measures a number of other grants and deductions have helped contribute to the $700.4 million figure.

Measures to help cut emissions and support the coal sector formed a big portion of last year’s support, although many of these initiatives are set to be cut with the axing of the carbon tax.

Hidden benefits

While the PC outlines a large portion of government assistance, it doesn’t cover all forms of government support.

Grudnoff said these “hidden” forms of support were particularly important for the resource sector.

“The mining industry has been particularly good at getting most of its subsidies in the form of tax concessions,” he said.

“That happens quietly. There’s no line item in the budget, there’s no tariff protection that you can point to and that’s why they don’t have a great deal of scrutiny.”

Grudnoff said some of the concessions that fell into this category included around half a billion dollars worth of exploration and prospecting deductions.

Construction deductions and the ability to write off equipment at a faster rate also form part of these benefits.

Summing it all up

The vagaries of government policy, as well as the complex nature of accounting and economics leave most arguments on this topic open to interpretation.

There’s no doubt mining’s level of assistance pales in significance to other sectors but there’s also no doubt it has received billions in support over the last few years.

Whether the $700 million outlined by the PC and and hundreds of millions more highlighted in Treasury’s tax concessions register as significant may ultimately depend on what part of the economy you rely on.