Article by Brad Thompson, courtesy of The Australian.
23.06.2025
Australia’s peak mining lobby says unfavourable policy settings are coming to the fore after a $14.6bn plunge in royalties and company taxes collected from the sector.
Future profits could be put further at risk if Chinese steelmaking demand continues to weaken.
The steep fall – $4.6bn in mining royalty collections and a $10bn plunge in the company taxes over 2023-24 – is exposed in EY research commissioned by The Minerals Council of Australia.
Miners want to engage with the Albanese government on ways to boost productivity amid growing concern about the direction of iron ore prices in a world of slowing global growth.
The EY analysis showed mining royalties collected by federal and state governments fell from $31.5bn in 2022-23 to $26.9bn last financial year, with the hit to government coffers driven by a 13.4 per cent drop in commodity prices.
MCA chief executive Tania Constable said the mining sector Australia was fiscally reliant upon is under growing pressure after contributing $394.6bn to government revenues – comprising $227.5bn in company tax and $167.1bn in royalties – over the past decade.
Commodity prices are up 35.4 per cent over the 10-year period as measured by Reserve Bank of Australia’s bulk commodity price index.
“If Australia wants to safeguard the jobs, investment, and revenue generated by mining, governments must support a more productive and competitive operating environment,” she said.
“That means tackling lagging productivity, streamlining regulation, and ensuring workplace laws support enterprise and innovation.”
Official ABS data shows the mining sector’s multi-factor productivity (MFP) has declined over four consecutive years.
Industry heavyweights BHP, Rio Tinto, Glencore and others have voiced alarm about a number of policies, including a rise in union power under the government’s industrial relations agenda. One iron ore boss last month branded the industrial relations changes the “definition of unproductive”.
The industry is also sweating on the federal government’s overhaul of the Environment Protection and Biodiversity Conservation Act.
Ms Constable said that while commodity markets had normalised, tax and royalty payments remained far above trend.
“Maintaining this level of contribution cannot be taken for granted. Global competition is fierce, and rising domestic costs make it harder for Australian operations to stay ahead.
“Improving our currently weak productivity growth presents a massive opportunity and the industry stands ready to work constructively with the government on these issues.”
The Centre for International Economics estimates that a 1 per cent improvement in labour productivity each year could by 2030 lead to a $290bn boost to economic growth and an $11,700 increase in real consumption per household.
Victoria reaped just $136m from mining royalties in 2023-24 while Western Australia and Queensland each pocketed more than $11bn.
The EY report noted thermal coal prices declined by 55 per cent in 2023-24, hitting the Queensland and NSW royalty contribution.
Iron ore prices remained stubbornly high at more than $US100 a tonne for the two-year period but last week dropped to a 10-month low of less than $US94 a tonne in futures contracts traded on the Singapore exchange.
The EY report shows WA’s royalty income fell to $4.12bn in 2015-16, the last big downturn in the iron ore industry. WA pocketed $11.86bn in royalties in 2023-24.