One of the biggest economic myths is that Australia is dependent upon mining for our prosperity. Yes, mining accounts for around 10% of Australia’s GDP, but almost all of that is its profits – and most of those either head overseas – especially so in the case of gas companies – or are delivered to the very wealthiest in Australia. The vast majority of Australians do not rely on mining at all.

This reality was made clear when BHP boasted last week that it paid “$5.6bn in wages, incentives and benefits paid to employees, $10.5bn in dividends to Australian shareholders”

But let’s be clear about who gets those dividends and profits – mostly it is the richest in Australia.

According to the latest taxation data from the ATO, just under 50% of the value of all dividends went to the richest 2.4% of Australians – those earning more than $250,000. Around 0.2% of Australians earned more than $1m a year, and yet that minuscule number received a quarter of all the dividends paid out by Australian companies. So while it might sound like that profit is helping “Australia” in reality, it’s mostly making the rich richer.

The figures from BHP also give away the very dirty secret about mining (other than the dirty greenhouse gases they emit) – mining is actually a rather small employer in Australia. There is a reason BHP wage bill is half the amount it pays to shareholders in dividends.

Less than 2% of all Australians are employed in the mining industry – just 229,500 people. Now yes they on average earn higher wages than most other Australians, but in terms of the overall amount of money paid in wages, the mining industry is essentially equal in size to the hospitality sector. The difference is that many, many more people work in hospitality – some 1.05m.

So why then is mining considered the bigger industry? Because of its profits.

Unlike most industries, mining company profits are larger than the amount they spend on wages. For every dollar mining companies spend on wages they make on average $6 in profit. By contrast, the manufacturing industry makes a profit of 79 cents for every dollar it spends on wages. The hospitality industry has it even harder – just 40 cents for every dollar spent on wages.

But all those profits are great for the economy right? Well yes sure, mining companies pay company tax, and that does go towards paying for government services. But company tax is around 20% of all taxes and the mining industry accounts for around 30% of that, so mining contributes around 6% of federal government revenue. But when you include all governments in Australia mining contributes only around 3% of all revenue. Handy yes, but let’s not act like the nation would fall over without it.

Households pay a lot more tax than do the mining companies; it’s just that personal income tax is pretty stable and so does not get the big headlines that a “boom in company tax revenue” gets when, for example, the price of iron surges.

So did BHP with its $14.5bn pay “half of Australia’s hospitals”? Well no not really. You could more accurately say that Australian workers who paid $334bn in personal income tax paid not just for all hospitals, but schools, aged pension, defence, but actually half of the $692bn the government spent last year.

While some mining companies might pay a relatively decent share of tax given the size of their profits, the oil and gas sector is notably woeful. Despite accounting for nearly 14% of all profits earned by the mining industry, according to the latest tax data, oil and gas companies only paid 3.5% of all the tax paid by the mining industry.

It is rather weird the BHP should be the one publicly doing the hard work defending the mining industry rather than gas companies Woodside or Santos or Ichthys.

If mining companies want to boast that their taxes pay for hospitals and schools, then clearly were they to pay more tax we could have better health services and better supplied schools.

So yes, we agree TAX IS GOOD!

And remember, when you hear mining companies talk about bringing in billions of dollars worth of exports, that money does not go to the government or to you – it goes to company shareholders – who need not be Australians.

The only way all Australians benefit from mining profits and exports is through tax, and right now mining companies are hoping to lower the amount of tax they pay and are desperate to avoid any attempts to pay tax on the super profits that come about from events such as the invasion of Ukraine. Most egregious is that the biggest beneficiaries of these efforts to raise a fair level of tax are foreign owned gas companies who often do not even have to pay a royalty for Australian gas which they then export.

Mining is an important industry, but it is not the only industry in Australia and not the most important either. Most other industries employ more workers and pay more in wages.

And also remember – the iron ore, gas, coal and other minerals are here – mining companies cannot just go leave to some other country and conduct their business.

Mining companies need Australia – and the government would be wise to remember that.