Only in crazy dreams do taxes reduce prices
ATAX on mining will put Australia’s economic recovery at risk and hurt the very people the federal government is trying to help – households and small business owners.
That is the one certainty that awaits if the government proceeds to lump an additional tax on mining companies, under the false notion that it will bring down electricity prices.
Australians know better than most the extraordinary value mining brings to communities and the wider economy. It is a job multiplier, wealth creator, business builder, service provider; an intrinsic part of our nation’s economic success story. And it will be for generations to come.
In the last financial year, mining companies paid almost 30 per cent of the total tax collected from companies. That is around $30bn to help fund hospitals, schools, mental health programs, infrastructure, the National Disability Insurance Scheme and pensions – in one year alone. Undermine it at your peril.
But that is exactly what the federal government is toying with by considering an additional tax on the sector. What will such a tax lead to?
More job losses at a time when families are doing it tough.
Less investment at a time when the Australian economy needs bolstering. More risk to the viability of power plants. Less tax revenue for schools, hospitals and infrastructure.
There is no question Australian families, low-income earners and small business owners are battling rising electricity prices.
We are not immune from the economic shocks that have come from Russia’s invasion of Ukraine, forcing up the price of oil, gas and commodities the world over.
These are genuine headaches for governments and institutions, and there are no easy answers.
But you don’t tax your way out of a problem. You don’t increase taxes to bring down prices.
And you don’t single out companies who have done the right thing and have cushioned the Australian economy and the federal budget during incredibly difficult times, and tax them more.
It’s a lazy way to approach policy and politics which will always have perverse outcomes. We need more investment in this country to bolster Australia’s economic recovery, not more tax or more regulation that will chase that investment from our shores. And that threat is real.
There are 140 mining projects in Australia that are awaiting final investment decision, including 46 critical mineral projects that are crucial to helping Australia meet its climate ambitions and targets.
That is potentially $77bn worth of investment, creating 33,000 jobs. We need those projects to go ahead.
To build the amount of renewable energy technology required to meet our emissions targets, Australia needs more critical minerals out of the ground.
More lithium for batteries, more copper for solar panels, and more cobalt for electric vehicles.
Not more uncertainty and risk that will cause investors to pause, or worse, look at other options overseas.
By hitting mining at this crucial hour, the federal government risks undermining its own climate ambitions and slowing down Australia’s energy transformation.
Combined with a rushed industrial relations policy that will lead to more strike action, this dual attack on mining will put countless mine developments at risk of cancellation or delay, at a time when we need more investment in our economy and more jobs.
The mining sector needs certainty to make long-term investment decisions. Why would companies
risk investing in Australia if the rules keep changing?
Earlier this month, Prime Minister Anthony Albanese said he would only be looking at sensible proposals to address rising electricity prices.
It is not sensible to slug the very sector that has propped up the economy and the federal budget through recent uncertain times.
It is not sensible to risk the ongoing economic recovery by threatening confidence and jobs.
It is not sensible to place a handbrake on the economy and investment when we need the accelerator pushed.
The federal government needs to urgently rule out this dangerous tax proposal and not compound the concerns households and businesses have about the rising cost of living.
The mining sector needs certainty to continue to invest in Australia’s economic future, without the risk of additional tax grabs delivered long after investment decisions have been made.