Australia has squandered a “once in a century” mining boom, with the benefits flowing to a small group of wealthy people rather than funding critical infrastructure, according to a new report.

An “archaic and inefficient” tax system meant the mining industry paid a far lower tax rate than comparable corporations, the CFMEU study found. While the average corporate tax rate stands at 21%, the mining industry contributes 13.9%, due to various tax deductions.

The report, conducted for the union by SGS Economics and backed by former independent MP Tony Windsor, found that mining profits have “far outstripped” growth in taxes and royalties, with this wealth highly concentrated among shareholders and mining licence holders.

While EBITDA in the coalmining, oil and gas extraction and metal ore sectors rose by $48bn to $88.5bn between 2006-07 and 2010-11, royalties to the states increased by just $6bn to $18.2bn.

And although the gross operating surplus of the sector ballooned from $28.6bn in 2003 to $112.9bn in 2012, the share going to its workers had reduced from 30% in 1990 to 20%.

This imbalance had starved the government of money to fund education and health, while people living in resource-dependent areas had suffered from a lack of services and social isolation, the report stated.

The mining boom had proved “disastrous” for other industries, such as tourism, due to the strength of the dollar.

“The resources boom has not created enough world-class Australian companies and industries and has not maximised the positive spillovers from resources development to other industries,” the report said.

According to the report, mining magnates such as Andrew Forrest, Gina Rinehart and Clive Palmer had become “politically and economically influential” and had put forward a vision of “fragmented national sovereignty, excision of the ore rich regions of Australia from employment protections, rights and citizenship integral with national sovereignty and a cross border fly-in, fly-out mining workforce.”

The report highlights comments by Rinehart in which she laments the cost of business in Australia, noting that Africans “are willing to work for less than $2 a day”.

The report states: “Although these statements are generally greeted with a combination of mirth and contempt, it is important to acknowledge that they are rarely challenged by the mainstream media. The evidence is quite clear that the returns to the resources sector companies are extraordinarily high.”

The decade-long mining boom has “abated”, according to the report, but the issue of crafting a tax that represents the vast wealth of mining companies is “unfinished business”.

The CFMEU urged the Coalition government to “revamp, not abolish” the minerals resource rent tax, which was introduced by Labor in negotiation with mining companies and has been severely criticised for its minimal revenue. The government has put forward a bill to scrap the tax.

Australia should follow the example of Norway, the CMFEU report argues. The Scandinavian nation has accrued a sovereign wealth fund worth more than $800bn from its North Sea oil reserves.

The report was published after the mining giant Rio Tinto announced it was reviewing its alumina refinery at Gove in the Northern Territory, risking 1,500 jobs.

Andrew Vickers, general secretary of the CFMEU mining and energy division, said Australia needed to do better.

“We’ve just experienced an investment boom of the like we’ve never seen before and we’re in the middle of a production boom with many years to go,” he said.

“We can’t keep squandering the opportunity to deliver real benefits to Australians from the finite mineral resources that belong to all of us.

“We need a federal government willing to stand up to self-interested mining companies and manage this resources boom in a fair and sustainable way. The minerals resources rent tax could have been better constructed, but it is a first step towards addressing this challenge.

“We shouldn't dump the MRRT, we should build on it for the long term.”