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Minerals tax would stifle investment: MCA

The Minerals Council of Australia has slammed proposals to revive a Minerals Resource Rent Tax (MRRT) put forward at last week’s Jobs and Skills Summit in Canberra.

Economist and former Hawke government adviser Ross Garnaut said a bigger slice of the resources sector was needed to prop up the economy.

“We are kidding ourselves if we think no deep wounds will be left in our polity from high coal and gas, and therefore electricity prices, bringing record profits for companies, and substantially lower living standards to most Australians,” he said.

“The appropriate public policy response is mineral rent taxation and not pressures for higher wages.”

MCA chief executive officer Tania Constable said if the MRRT was imposed, it would stifle investment in mining and force companies to go offshore.

“A new tax on Australian mining companies would seriously undermine our international competitiveness, resulting in jobs losses across the country and devastating many communities which rely on mining,” she said.

“The Jobs and Skills summit is meant to be discussing how to create more jobs and improve skills, but Garnaut proposed a tax that will do the opposite. Make no mistake, jobs would go.

“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 $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.”
Constable said the Australian mining industry always paid its fair share of tax while providing royalties to state governments for improved roads, hospitals and other infrastructure and services.

“Garnaut refers to a low tax take in Australia compared to developed countries,” she said.

“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.

“The minerals industry has been paying tax consistently for years and record amounts over the last decade.

“The return to the community from Australia’s mining industry has again hit record levels with a combined $43.2 billion in company tax and royalties paid in financial year 2020-21, 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 contributing significantly to federal, state and territory governments at a time when they needed it most, during the COVID pandemic.”

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.

Editor of industrial titles and mastheads with Prime Creative Media. Publications include Rail Express and Australian Mining (web content).
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