Rudd doubles down on defunct mining super profits tax

Iron ore

Former Australian Prime Minister Kevin Rudd has singled out BHP, Rio Tinto and Fortescue Metals Group for a proposed super profits tax payment.

Rudd’s proposal calls back to the plan to deliver the Resource Super Profits Tax on mining profits during his time as Prime Minister and the 2010 commodity price boom, leading to a significant industry backlash.

This saw mining companies join forces with a million-dollar media campaign to criticise the tax.

The Super Profits Tax was a proposed 40 per cent tax on mining profits in addition to regular company income taxes.

Rudd, who was succeeded by former Prime Minister Julia Gillard, changed the plan into the Minerals Resources Rent Tax in 2012, which levied 30 per cent of profits from iron ore and coal mining in Australia.

Former prime minister Tony Abbott repealed the tax in 2014.

“As was the case during the last resources boom, and the one before that, the super-profits earned by a handful of resource majors in this country are a giant rip-off of the Australian people,” Rudd said on Wednesday.

“Furthermore, the greed of these three is unbelievable: they haven’t even bothered to establish serious, large scale charitable foundations to benefit the Australian people at the scale that other serious global firms do.”

Western Australia’s Department of Mines, Industry Regulation and Safety (DMIRS) stated that iron ore sales from the state had reached $116 billion last year.

In 2020, a Deloitte Access report commissioned by the Minerals Council of Australia revealed mining companies paid a record high $39.3 billion in company taxes and royalties during the 2018-19 financial year.

Rio Tinto paid $9.8 billion in taxes and royalties to Australia in 2020.

Meanwhile, BHP’s 2020 economic contribution report revealed that $US7.5 billion ($9.7 billion) of tax, royalty and other payments were provided to Australia.

“I fully understand the financial investment needed for long term projects. But nowhere in their long term financial planning did any company forecast prices at this level,” Rudd said.

“That’s why the Australian people, who actually own these resources and merely lease them to these companies, deserve a higher return.

“That’s why I believe these three majors should pay a super-profits levy into a national investment fund to underpin the future of Australian higher education and research, because this is the sector that will need to generate the next tranche of national wealth.

“We need Australian equity in the global technology revolution now underway, where we are in danger of owning none of the intellectual property and assets that will drive future global growth.”

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