Big Australian’s budget blast: Investors will walk away if taxes rise further
Mining giant BHP has warned business could walk away from investment in Australia if taxes continued to rise in the Federal Budget.
BHP is selling the Daunia and Blackwater mines (Pic: BHP)
But in its submission to the Federal Budget, BHP also said Australia had to address its debt issue, which increased from $534 billion in March 2019 to $894 billion in October last year, mainly because of Covid-related spending.
It warned that the Australian economy was facing headwinds including a slowdown in advanced economies, geopolitical tensions, inflation, sluggish productivity growth, tight labour markets and supply chain constraints.
It also forecast that Australia’s exports – particularly coal, gas and iron ore – would come under increasing pressure because megatrends like decarbonisation and that Australia’s accumulated national debt would also require management.
But it said business was already facing a stiff tax burden.
The mining giant said it had paid $90 billion in the past decade on Australian taxes, royalties and other payments to governments of which $18.5 billion was paid in 2022.
In Queensland and Western Australia, BHP-operated projects contributed close to 9 per cent and 13 per cent off all revenue respectively.
“Globally, BHP’s total contribution to governments exceeded our ordinary dividends to shareholders,” its submission said.
The company said stable taxes were crucial for companies considering investments and that the recent hike in coal royalties in Queensland was “a case in point”.
It said it had damaged investor confidence and prompted businesses to reassess the risk profile of the state.
“From a BHP standpoint, we will not invest any more growth capital in Queensland as a result of the increase, the Budget submission said.
“Federally, any attempt to address structural pressures on the Budget by increasing the tax burden on business would result in a similar outcome: reduced investment, fewer jobs and, in the long term, lower living standards for Australians.”
It said the Albanese Government’s industrial relations policy of “same job, same pay” would compound problems in productivity and competitiveness. This was a reference to the use of labour hire, particularly in the mining industry where there were distinct differences between pay and conditions for BHP’s workforce and those supplied by labour hire companies.
