Our two-speed economy has a two-tiered tax system, with capital-intensive mining companies paying among the lowest rates of corporate tax and the labour-intensive service sector paying among the highest. All companies face the same nominal 30 per cent tax on income but the existence of accelerated depreciation and other tax concessions deliver disproportionately for the miners. While the resource super profits tax and the mineral resources rent tax were meant to address this issue, the big miners flexed sufficient muscle to ensure that even though coal and iron ore prices are well above historic averages, no “super profits” tax has yet been paid. Australia is among the lowest taxed countries, according to the OECD. The recent push by business groups to raise the GST is an attempt to shift the debate about where to find more revenue away from miners. The last thing the miners want is to revisit the design of the mining tax, which was a hasty compromise.
Luciana Lawe Davies Media Adviser