New industry modelling obtained by The Australian reveals royalties and company tax takes are estimated to plummet from $73.8bn in 2022-23 to $63.8bn in 2023-24 and $48.9bn in 2024-25.
After Jim Chalmers and state treasurers rode a post-pandemic commodities boom to deliver budget surpluses fuelled by tax revenue windfalls, miners are concerned about price shocks, supply chain pressures fuelled by global conflicts, high company tax and royalty rates, and onerous union-engineered industrial relations rules.
Delegates attending the 50th ALP national conference in Adelaide this week will discuss a push to increase taxes on the resources sector, with the party’s draft national platform including a section focused on a “fairer” tax system being applied to Australia’s natural resources.
As federal, state and territory budgets come under pressure from soaring debt and spending levels, a new EY Parthenon report commissioned by the Minerals Council of Australia shows bumper resources royalties and company tax revenues are sliding from record highs.
MCA chief executive Tania Constable, who represents mining giants including BHP, Rio Tinto, Hancock Iron Ore, Lynas, Glencore and Whitehaven, said the report found the minerals sector contributed $432bn in company taxes and royalties between mid-2015 and mid-2025.
“The reduction in net company tax payments primarily reflects lower coal and bulk commodity prices, alongside rising operating costs, which lowered mining sector profitability,” Ms Constable told The Australian.
Amid fears in the oil and gas industry and across key Asian countries that import Australian LNG that the Albanese government will in coming years impose a tougher gas tax regime, The Australian a fortnight ago revealed the ALP draft national platform was amended to support using the taxation system to increase revenue from resources.
With Dr Chalmers refusing to rule out future tax increases on the gas sector, the draft platform now states: “Labor will ensure that the Australian people receive a fairer return from their natural resources including through appropriate taxation arrangements, while securing Australia’s role as a reliable international energy supplier and investment partner.”
As federal and state governments are urged by miners to avoid imposing new taxes, Ms Constable said “mining is Australia’s largest taxpayer by industry, and accounts for more than a quarter of all company tax paid in FY24”.
“This helps pay for education, health, police, transport and other vital services and infrastructure for all Australians,” she said.
“Over the past decade, Australia’s minerals sector has generated historically high royalty and company tax revenues, particularly during the commodity price surge in the early 2020s. More recently, fiscal revenues have moderated as commodity prices have eased from peak levels in 2022 and 2023.
“Minerals sector company tax provides more than one-third of tax payable by large and international businesses in Australia, contributing 38.5 per cent in FY24.
“Mineral royalties are collected by state and territory governments and remain a significant source of fiscal revenue for resource-producing jurisdictions.”
Mining chiefs say the decline in royalty payments is related to lower thermal and metallurgical coal prices. Higher royalty returns in Queensland and NSW are directly linked to the state governments increasing coal royalty rates to fill their budget coffers.
The EY Parthenon report, which draws on publicly available data from the Australian Bureau of Statistics, Tax Office, Reserve Bank and state and territory budget papers, derived estimates for the 2025 financial year by “using ABS mining profit data benchmarked against historical ATO company tax outcomes”.
“Consistent with movements in the bulk commodity price index, estimated net company tax payments have declined over the past two years. While both royalties and net company tax payments are expected to fall in FY25, they remain well above the decade averages,” the report states.
“Minerals sector royalties are calculated as $20.2bn in FY25, down from $26.9bn in FY24, largely reflecting the 19.2 per cent decline in commodity prices. Net company tax payments are estimated at $28.7bn in FY25, falling from $36.9bn in FY24, with cost inflation and lower commodity prices contributing to reduced profits.
“The minerals sector share declined in FY25 as lower commodity prices reduced mining profitability, while company tax collections outside the mining sector remained comparatively resilient. Minerals sector company tax accounted for 20 per cent of total company tax collections in FY25, down from 25.6 per cent in FY24.”
As the Albanese government anchors its foreign diplomacy push with the US and other allies on access to Australia’s vast critical minerals and rare earths deposits, and with federal and state budgets still reliant on mining company tax revenue and iron ore and coal royalties, the draft ALP national platform includes a section praising the resources sector.
The government’s Future Made in Australia blueprint and development of renewables is predicated on the rapid development of domestic resources. Labor is also keen to hold seats gained at the 2022 and 2025 elections in the big mining states of Western Australia and Queensland.
The draft platform states: “Labor highly values the vast contribution Australia’s resources sector makes to our national economy and prosperity and recognises the importance of Australian resources to the energy security and industrial capacity of our trading partners. We equally value the contribution of all working people employed in these industries and recognise the challenges faced by fly-in-fly-out and drive-in-drive-out workers and their families.
“Labor recognises that regions and communities that host mining operations face unique challenges like accommodation for transient workforces, heavy use of public infrastructure, and market volatility. Labor is committed to current and future mining regions benefiting fairly from the economic activity they generate and supports investment back into these regions.”
Geoff ChambersPolitical editor