Mineral resources minister Keith Pitt says new figures released by the Minerals Council of Australia on royalties and taxes paid by the minerals industry confirm just how crucial the sector is for the national economy.
The report, compiled by business consultancy Deloitte, shows the strong contribution of the industry over the past decade.
Between 2010-11 and 2019-20, the sector contributed $238.8-billion in taxes and royalties to federal, state and territory governments – $132.8-billion in tax and $106-billion in royalties.
Sector pays 30 percent of all federal company tax
Company tax paid by Australia’s minerals sector has grown from $14.5-billion in 2017-18, to $22.3-billion in 2018-19 and $24.1-billion in 2019-20.
According to Tania Constable, Chief Executive Officer of the Mining Council, the sector contributes 30 percent of all federal company tax payments.
Strong production and commodity prices – particularly for iron ore amid strong Chinese demand and continued weakness in supply from Australia’s global competitors – is boosting earnings from Australia’s mineral exports and increasing company tax payments.
“Mining profits are expected to further improve throughout 2020-21 in line with higher prices and export volumes for Australian resources, outweighing a decline in the value of coal exports,” she stated.
Pitt noted that mining’s contribution helped place the national economy in a strong position leading into the pandemic and was now leading the way to recovery.
Iron ore providing a massive boost to WA economy
“Even as the coronavirus pandemic hit global markets in the last financial year, mining companies paid a record $24.1-billion in federal taxes and $15.2-billion in royalties to state and territory governments,” the minister said.
“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 and that figure should increase again this year as prices hit record highs.”
The Federal Government expects that, while taxes and royalties from the coal sector fell slightly last year as Covid affected global industrial activity, demand will rise over the next few years as economies recover.
In the latest national Budget, the Government announced a $20-million Global Resources Strategy to help the resources industry expand into new markets around the world, particularly in South-East Asia and the Indo-Pacific region.