Minerals paying its share, Hooke

Speaking about the Federal Government’s Henry Tax Review, Hooke said the company tax and royalties that mineral companies pay are progressive and fair.

“The Australian mining industry directly employs more than 142,000 people and will pay state and territory governments an expected $7.4 billion in royalties this financial year,” he said.

“Double what was paid just three years ago.”

Hooke disagrees with any suggestions that taxes on the minerals industry should increase.

“The current temptation for opportunistic increases in the tax take is based on the false premise that the public is not already getting increased return from the improvement in terms of trade,” he said.

The New South Wales Government recently announced a blanket increase of 1.2% on coal royalties, in a move the State’s miners see as nothing more than a cash grab.

“Estimates show that the minerals industry will have delivered an additional $15 billion in revenue to the Commonwealth this financial year in the form of both direct tax and the tax on the entire sector’s contribution to national productivity,” Hooke said.

“The industry is paying its way.”

Proposed changes to the royalty system contained in the Henry Review should be open for further discussion, the MCA said.

According to the MCA public submission to the review, the existing royalties system should be allowed to continue for projects already in progress, while any other changes should analysed according to each project.

Changes made based on the success of the minerals industry would have negative effects on the business as a whole, Hooke said.

“Any attempt to re-engineer the inherent progressiveness in the design of Australia’s taxation system and royalty regimes on the basis of the sector’s improved economic circumstances would undermine the integrity of the system and business confidence,” he said.

“It would increase the sovereign risk and disincentives to investment.”