Policies
Mining, Resources & Energy
THESE INDUSTRIES SHOULD PUT SOMETHING BACK
- The introduction of royalties
- How these industries could reduce their payments.
Policy Summary
Australia has vast mineral wealth, but once it's dug out of the ground and sent overseas, it's gone. The Good Party thinks royalty payments, similar to those levied on exported fossil fuels by Norway, on these finite resources are fair and reasonable.
Royalties could be adjusted as world market prices move up or down to be equitable for both the miners and the nation.
And in more detail...
Most other countries use a royalty mechanism, and Norway has built a $1 trillion sovereign wealth fund based on royalties for its oil and gas.
Since 1996, Norway has been taxing the profits of its oil and gas sector at 78%. In 2023, this has generated a staggering A$127 billion or around $23,500 for every Norwegian citizen (figures from The Australia Institute).
Meanwhile, Australia’s tax on the gas sector in the same period generated a measly $16.3 billion.
Mining companies' argument that they pay taxes and provide jobs doesn’t hold up when you examine it closely. The taxes paid are always minimised, and the jobs are rarely permanent, with the mining operation folding when the resource runs out or the market dips.
For example, the WA Government is expected to receive $522 million in royalties from the gas industry in 2024-25, down from $660 million in 2023-24, and will contribute just 1.3% to state government revenue.
This is less than half of the $1.319 billion expected from vehicle registration fees.
The gas industry also pays little in federal tax – the combined tax payments of Chevron, Exxon, Woodside, and Shell raise less money than the beer excise. And just 0.7% of the state’s workforce is employed in oil and gas extraction.
The federal government needs to renegotiate all future fossil fuel and mining contracts so that Norway-level royalties are paid on these exported finite natural resources.
Mining companies' argument that they pay taxes and provide jobs doesn’t hold up when you examine it closely. The taxes paid are always minimised, and the jobs are rarely permanent, with the mining operation folding when the resource runs out or the market dips
How miners could reduce their royalties and do some good
A mechanism that would allow these industries to reduce royalty payments would be to invest substantially in green energy projects—such as green hydrogen to replace coal and gas in power stations, and/or used in the production of green steel and aluminium.
It really is time for the mining and fossil fuel industries to put something back.
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