Friday, 21 October 2011

All that glitters is not gold

Letter to the Editor in The Daily Examiner 20 October 2011:
I read with interest The Daily Examiner article “Our Valley of riches: Miners homing in on billion-dollar resources” on 10 October 2011.
The fact that “Red Sky Energy has also signaled to investors that it envisages gross revenues of $4 billion from its Clarence Moreton Project”, that on today’s gold prices Centius Gold could realize “$2.3 billion in revenues” and, that Anchor Resources is progressing towards re-opening old workings during a period of record antimony metal prices, might lead one to suppose that the NSW Treasury along with communities on the Dorrigo Plateau and in the Bellingen, Coffs Harbour and Clarence Valley local government areas might see a hefty financial benefit from all this commercial activity.
This is far from the reality of the modern mining industry in Australia.
Not only will the number of mining jobs be small, as Anchor Resources’ admission that it is only looking to create 60 positions to last less than ten years clearly demonstrates, but the bulk of mining profits derived from the projected shaft and open-cut mining may never see taxation applied.
So adding little to the O’Farrell Government coffers and thereby giving even less to NSW residents by way of government resources.
In the case of coal seam gas mining specifically, the NSW Government has granted a five year moratorium on the payment of mining royalties [NSW Dept. of Primary Industries,2011]. In that matter of gold mining, it will be exempt from the federal proposed mineral resources rent tax no matter how large the profits of individual companies [SMH 28.09.11].
As for mining generally; in 2007-08 Australian Taxation Office statistics recorded 4,290 mining companies having combined incomes which totaled $160,323,192,189, which in turn had combined taxable incomes of $29,010,243,407 and net tax actually paid was $8,068,463,15 after all allowed deductions had been made. Mining royalty payments made in that financial year added up to a tax deductible $3,924,902,975.

Of these 4,290 mining companies, there were some who paid no tax at all and these comprised 68.3 per cent of all mining companies. Which means only around 1,360 mining companies Australia-wide paid tax in that year.

How did they do that? Well, there are at least 20 deductions, rebates, concessions, exemptions, offsets etc., available to the mining industry and their combined value is literally worth billions. In 2007-08 the industry total for expenses claimed under R&D concessions alone was $2,508,321,897 and immediate deduction for capital expenditure $3,785,347,506.

It is worth noting that in 2007 the Business Council of Australia in “Tax Nation” stated: "Taxes collected are negative for the mining industry group because as major exporters survey participants reported a significant GST refund which more than offset other taxes collected." []
In other words, from all these billions of dollars quarried from mining ventures on the NSW North Coast state government and taxpayers are likely to receive nothing or next to nothing once annual tax returns are lodged.

A state of affairs all candidates in the forthcoming Clarence by-election might like to consider before deciding on what policy position they will take in relation to mining in the environmentally sensitive Nymboida River section of the wider Clarence River catchment area.


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