- Media Release
Net cashflow tax would be a hammer blow to Australian mining competitiveness
Australia’s minerals industry opposes the proposal released today by the Productivity Commission to impose a net cashflow tax that would increase the tax burden on mining companies earning over $1 billion.
Mining is the backbone of the Australian economy, and government policies should help mining grow to benefit all Australians.
Mining is already Australia’s largest contributor of company tax, paying $59.4 billion in royalties and taxes in 2023-24 and $395 billion in combined royalties and taxes in the last decade.
MCA member companies are already under unprecedented cost pressure from industrial relations changes, mounting energy prices, lengthy and costly project approval delays and increased royalties.
The Productivity Commission’s recommendation to shift to a hybrid corporate tax system with a tax rate of 28% for larger firms, with a net cashflow tax of 5% for all companies, would add further to this pressure.
The Commission has admitted in changing its proposed company tax rate on large companies from 30% in its original report to 28% in today’s report that a cashflow tax would damage competitiveness.
Reduced competitiveness means fewer jobs for Australians, less support for communities and driving investment offshore instead of growing the minerals sector at home.
Productivity Commission Chair Danielle Wood has herself stated the importance of reducing costs for long-life, capital-intensive businesses such as mining operations when she told the National Press Club in August that: “…our current system does not treat all investment equally. It imposes the biggest cost on higher risk, long lived and capital-intensive investment – the type that can offer a big productivity kicker”.
The MCA strongly encourages the Federal Government to pursue other reform options such as accelerated depreciation along with reducing regulation and red tape to support the ability of Australia’s minerals sector to contribute to the nation’s economic success.