Australia could collect around $45 billion more each year from the finite mineral and petroleum resources it owns, according to a new report from the Prosper Australia Research Institute. The report, Australia’s Resource Wealth Giveaway, compares Australia with comparable resource-rich jurisdictions and finds that a fairer return is possible without stopping companies from making a profit.
The report finds:
- Petroleum sector: Australia could collect an additional $16 – $18 billion a year if it achieved petroleum revenue shares comparable to Norway and Alaska. Australia collects just 14% of production value, compared with around 40% in Norway and 42% in Alaska.
- Mining sector: Australia could collect an additional $28 billion. Market-linked royalties for mining could help close this revenue gap.
- Combined: Australia could collect around $45 billion more annually, which could provide significant cost-of-living relief and protect future cuts against essential services.
- The report estimates a ‘double loss’ where part of this $45 billion of lost revenue is being captured by Australian resource projects with direct foreign state-linked ownership – this represents around $2 billion a year going to foreign balance sheets rather than our own.
Prosper Australia is calling on state and territory governments to strengthen existing royalties so payments rise when commodity prices boom, alongside Commonwealth action to improve Australia’s weak petroleum revenue collection.
Rayna Fahey, Executive Director of Prosper Australia, said:
“Australia’s natural resources belong to all of us. When their value rises, all Australians should share in the upside.”
“Companies should earn a commercial return for extracting our resources, but when commodity prices boom, the public return should rise too. We can achieve this without discouraging investment.”
‘The choice is not between weak public capture and nationalisation. There is a practical middle path: keep private investment, allow viable projects to earn commercial returns, and collect more for the public when windfall gains arrive.
“State Treasurers don’t need to invent a new tax. Governments can improve the royalties they already collect to capture more revenue during resource booms and deliver a fairer return for all Australians.”
