PERTH (miningweekly.com) – The Minerals Council of Australia (MCA) says that Australia needs to attract more investment in exploration, mining, minerals processing and mining-related manufacturing if the economy is going to benefit from growing global demand for minerals and metals.
“There is strong competition for this investment from other mining countries,” said MCA CEO Tania Constable.
She pointed out that the return to the community from Australia’s mining industry has again hit record levels with a combined A$43.2-billion in company tax and royalties paid in financial year 2020/21, a 16% increase from the A$37.3-billion contributed in the previous period.
Company taxes paid reached a new record high of A$26.5-billion and royalties also reached a high of $16.7-billion in 2020/21 contributing significantly to federal, state and territory governments at a time when they needed it most during the Covid-19 pandemic.
The MCA’s comments come amid calls by former Australian Consumer and Competition Commission chairperson Rod Sims' call to government to return to carbon and mining taxing, and to target oil and gas companies.
In an interview with ABC, Sims said that the federal government was "not taxing [oil and gas companies] enough, given the environment we are in".
"If they make returns way more than they ever expected to justify their investment, then I think it is only fair the community gets a better return,” he was quoted.
The MCA said that the call for extra taxes on mining profits, proposed by Sims, disregards the fact that mining investment is highly uncertain and subject to periods of high and low revenues over a mine’s life.
“The effective tax rate on Australian mining investment is already high relative to many mining jurisdictions in other countries,” Constable said.
“Rather than proposing piecemeal changes to taxes based on short term conditions that will lead to perverse outcomes, Australia needs comprehensive reform of the tax and transfer system to enable the economy to deliver the growth, incomes and jobs that underpin the nation’s prosperity.
“The mining industry delivers benefits for all Australians via the tax and royalty revenue it pays to governments each year. It has been paying tax consistently for years and record amounts over the last decade.”
She noted that the record company and royalties payments are highlighted in an Ernst & Young report commissioned by the MCA which also shows that in the last decade (between 2011/12 and 2020/21), the mining industry contributed A$254-billion in company taxes and royalties.
“Company tax and royalties payments are expected to continue increasing in 2021/22 in line with increases in export earnings. This is driven by a positive outlook in the price and quantity produced of metallurgical and thermal coal coupled with a robust year for iron-ore, gold and base metals.
“The industry in Australia continues to pay the highest average wages, the most company taxes, delivers the most export revenue and is critical to supporting regions and communities, supporting 1.1-million jobs in the mining industry and its supply chains,” she added.