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Tax call ignores cyclical coal trends

The Minerals Council of Australia (MCA) has slammed a report by The Australia Institute, which called for a windfall profits tax on coal and gas.

The report said Australian coal export revenue reached $112 billion in 2021-22, up from the $73b the previous year. Windfall profits to coal companies in 2021-22 were between $39b and $45b, of which up to $23b was directly attributable to the Russian invasion of Ukraine.

MCA chief executive Tania Constable said a strong mining industry was crucial for Australia’s economic future, the creation of more jobs and opportunities, and the record funding of essential government services.

“The report released by The Australia Institute not only ignores that reality, but fails to understand the cyclical nature of coal mining company profits,” she said.

“When mining is strong, Australia is strong. That has been the experience of our national economy for decades, with our mining community contributing significantly to Australia’s economic success story.

“As Australia heads into the new year facing economic headwinds as the post-COVID recovery begins to recede, the strength of our mining sector will be an important ballast.

“Attempts to add an extra tax on the mining sector, or add further restrictive regulation, would impede the sector’s critical role in Australia’s economic recovery.

“In five out of the last seven years, coal companies in Australia made annual losses, as low commodity prices combined with increased costs of production to impact the sector.”

Constable said the profitability of coal mining companies must be viewed over the long term.

In the last decade, mining companies have contributed $142.6b in company tax and $112b of royalties – payments that help fund vital government services including mental health, aged care and childcare. They also pay for schools, hospitals and critical infrastructure.

According to the Australian Taxation Office, the Australian mining industry remains the largest contributor to the Australian economy.

“In the 2020-21 financial year alone, the 2468 largest entities in Australia paid $68.6 billion in company tax. More than 40 per cent of that figure was paid by mining companies,” Constable said.

“Mining has underpinned the nation’s prosperity and will continue to into the future.”

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