The SMH’s Michael West is one of the last of the MSM good guys. He’s recently been in tremendous form tracing the tax lies of various rentiers and today it’s the turn of the Minerals Council and its fig leaf, Deloitte:

Australia’s mining fraternity is still basking in the era of entitlements but continues to talk up its contribution to the nation’s coffers by conflating company tax payments with royalties.

“Deloitte Access Economics estimates the total tax burden on the minerals sector at $22.7 billion,” says the introduction. This figure, however, includes $10 billion in royalties. Royalties are not tax.

The document is cleverly worded. Tax and royalties are analysed separately within the report but the attending spin from the Minerals Council does little to dispel a widespread confusion that royalties and tax should be viewed as more or less the same thing.

Royalties are a cost of the resources extracted from the earth and are paid to Australian state governments representing Australians as owners of those resources.

The public needs to be educated that royalties are not an industry “contribution”. The resources that miners acquire are owned by Australians. If mining companies wish to make money out of extracting, processing and selling resources then, in layman’s language, the royalties are the market price paid to Australia for the transfer of ownership of those raw materials. They are a cost of the miner’s production. Their situation is no different to Ford buying the steel (whether local or imported) required for the cars they used to make here before the mining boom.

The issue is not about the market price of the raw materials that either Ford or miners use in manufacturing their products. Does Ford classify its payments for steel and rubber as a tax burden?