The revival of a Minerals Resource Rent Tax (MRRT) proposed by economist Ross Garnaut at the Jobs and Skills Summit would stifle investment in mining and force companies to go offshore, according to the Minerals Council of Australia (MCA).
MCA Chief Executive Officer Tania Constable said imposing a new tax on Australian mining companies would undermine the country’s international competitiveness, resulting in “jobs losses across the country and devastating many communities which rely on mining”.
She said the failed MRRT created instability and uncertainty, and resulted in project delays.
“Australia must attract more capital investment to generate productive growth and that will not occur if Australia’s corporate tax system is made even less internationally competitive.
“With over AU$4 trillion of investment in new mining and minerals processing up for grabs globally Australia should be doing everything in its power to attract some of it.
Ms Constable said while Garnaut refers to a low tax take in Australia compared to developed countries, Australia’s company tax rate is the third highest in the OECD and well above the OECD average.
“The OECD countries have higher GST rates, basically double Australia’s so they rely less on taxing income.
In 2020-21, Australia’s mining industry hit record levels with a combined $43.2 billion in company tax and royalties paid, a 16 per cent increase from the $37.3 billion contributed in the previous period.
Company taxes paid reached a new record high of $26.5 billion and royalties also reached a high of $16.7 billion in 2020-21..
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 $254 billion in company taxes and royalties ($142 billion and $112 billion respectively).
Ms Constable said 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.”
