The Australian mining sector doubled its economic contribution over the last year thanks to massive tax increases in 2016–17, according to David Byers, interim chief executive of the Minerals Council of Australia.
Citing statistics from a new report by Deloitte Access Economics, entitled Estimates of royalties and company tax accrued in 2016–17, Byers pointed to the $12.1 billion paid by Australian mining companies in tax in 2016–17, a figure nearly four times higher than 2015–16 and the highest figure since the mining boom of 2011–12.
In addition to the $12.1 billion in taxes, Australian mining companies paid $11.2 billion in royalties in 2016–17 (nearly 40 per cent higher than 2015–16 figures), leading to total government payments of $23.3 billion, twice as high as 2015–16.
“Australia’s world-class mining sector has doubled its contribution to funding for roads, schools, hospitals, police and other essential services on which Australians depend since the previous year through a massive increase in company tax and royalty payments in 2016–17,” said Byers.
“The increase in company tax payments is driven by stronger commodity prices and hence profitability in 2016–17. Company tax is a profits tax which is responsive to rises and falls in commodity prices.
“After a fall in profits and commodity prices between 2012 and 2015, company tax declined, but is now on the increase in parallel with commodity prices.”
According to Deloitte’s report, Australian miners paid more tax in 2016–17 than the Australian Government spent on the Pharmaceutical Benefits Scheme ($11.5 billion).