Mining industry pays record tax contribution to Australia

The payments were highlighted in Deloitte Access Economics’ report from May 11, which was commissioned by the MCA.

A record $24.1 billion was paid in company tax by the minerals sector, which is around half of Australia’s annual defence budget.

The sector also paid a record $15.2 billion state and territory royalties in 2019-20.

Minister for Resources, Water and Northern Australia Keith Pitt said the figures reaffirm how vital the minerals sector is for Australia’s economy.

“From the 2010-11 financial year to 2019-20, the minerals sector contributed a total of $238.8 billion in taxes and royalties to state, territory and federal governments,” he said.

“Their contribution helped place the national economy in a strong position leading into the COVID pandemic, and is now leading the way to recovery.”

According to MCA chief executive officer Tania Constable, the record tax contributions demonstrated the industry’s resilience to the COVID-19 pandemic.

“Australia’s minerals sector contributes 30 per cent of all federal company tax payments, with strong production and commodity prices – particularly for iron ore amid strong Chinese demand and continued weakness in supply from our global competitors – boosting earnings from Australia’s mineral exports and increasing company tax payments,” she said.

Pitt said iron ore price hikes have been a frontrunner for the increased mining royalties and have also bolstered declining coal demand.

“In Western Australia, on the back of rising iron ore prices, mining royalties in the 2019-20 financial year jumped by nearly two billion dollars to a staggering $8.44 billion dollars and that figure should increase again this year as prices hit record highs,” he said.

“While taxes and royalties from the coal sector fell slightly last year as COVID affected global industrial activity, forecasts indicate demand will rise over the next few years as economies recover.”