The mining lobby’s tax deductible status costs taxpayers more than that of environmental groups which are under the microscope of a federal senate inquiry, according to research by the Australia institute.

The progressive thinktank has told the inquiry – which was set up after lobbying by the Minerals Council of Australia – that mining companies have written off at least $20m a year from their tax base through lobbying fees over the last five years.



The mining lobby in its own submission had taken issue with donors to environmental groups writing off $18m a year in tax deductions.



The Australia institute’s director of research, Rod Campbell, said the mining lobby was trying to distract from the industry’s own issues with tax avoidance by “insisting public attention is devoted to an inquiry that’s essentially about people dressed up as koalas”.



“They have been outed [by another Senate inquiry] as serial and major tax avoiders and I think this is in some ways a bizarre attempt to reclaim some of that lost ground,” Campbell told Guardian Australia.

“I think it’s an amazing example of the lobbying power of the minerals industry. BHP wants the government to tax koalas and not them.”

The Australia Institute said lobbying fees had allowed mining companies to write off $145m dollars over the past 10 years – and an average of $20m a year over the last five years. It also said the mining industry employed 2% of the national workforce but 15% of firms on the federal lobbying register.

Mining companies poured $500m into their main lobby groups over the last 10 years, with those contributions accelerating during the campaign against the former Rudd government’s mining tax and a public relations battle by the coal seam gas industry.



$200m of that went to the minerals council, which wrote to federal attorney general George Brandis before the inquiry calling for environmental defenders offices (EDOs) to be stripped of their tax-deductible status.



The inquiry heard in April that EDOs, which have acted as key watchdogs against environmental breaches by big business, are on the brink of demise amid the Abbott government’s push to end tax deductions for their donors.

The Minerals council previously led the charge against the mining tax, which budget papers estimated cut tax revenue by $5.3bn over the forward estimates.



John Menadue, a former senior public servant, diplomat and business executive, has said mineral council lobbying against the mining tax was the most serious recent example of “vested interests corrupting public debate and policy in Australia”.

The Australia Institute found revenue to the minerals council tripled over this period, between the 2009 and 2012 financial years.The lion’s share of lobbying fees was now going to the Australian Petroleum Production and Exploration Association as CSG became more of a political issue especially in NSW.



The Australia Institute in its submission said deductions given to donors to environmental groups from Greenpeace to smaller conservation groups and state-based environmental defenders offices reduced federal tax revenue by 0.005%.



Campbell said there was a clear contrast between the “enormous public benefit derived from increased pressure and monitoring of environmental conditions by people who care about them” and the effects of the mining lobby securing billions of dollars in subsidies for its members.



He said the mining lobby’s efforts in keeping diesel cheap for its members cost taxpayers more than $4.5bn a year, while lobbying by Rio Tinto and BHP Billiton had also prevented an inquiry into the $75bn a year iron ore industry.

“It’s an attempt to distract public and political attention at a time when the mining industry is under a lot of pressure on tax,” he said.

“For the grand total of a 0.005% reduction in federal government revenue, the public gets the benefit of an active environmental NGO community, bolstered by thousands of volunteers,” Campbell said.

“Big mining’s own tax-deductable lobbying expenses put this figure in the shade.”

The estimated $18m in tax deductions a year was for the 16 most “politically active” environmental groups, according to a submission to the inquiry by the NSW Minerals Council.

A spokesman for the MCA said Treasury analysis noted in a department of environment submission estimated a total of $45m a year in tax revenue forgone through donations to all registered environmental organisations.

Treasury noted this was “likely to be an upper estimate” given evidence a substantial proportion of donors did not claim deductions.

The MCA spokesman said it was wrong to draw an analogy between its tax status – akin to that enjoyed by unions – and of that of environmental organisations which “enjoy the same tax privileges as public hospitals, school building funds and benevolent institutions that relieve poverty and distress”.

“These privileges are contingent on satisfying reasonable regulatory requirements that help maintain public confidence in the not-for-profit sector,” he said.

He said it was “clear that the intent of the legislation that provides the tax-deductibility status to environmental organisations does not allow for political campaigning”.