Miners claim to shovel $37bn into communities

By Julian Bajkowski

The minerals and mining industry is digging deep to produce evidence that its activities contribute far more to communities than the ill-fated Minerals Resource Rent Tax (MRRT) could ever collect.

As the Abbott government prepares the MRRT for burial by repealing its legislation, powerful peak body the Minerals Council of Australia has launched a research report that estimates “$34.7 billion was spent on community infrastructure, Indigenous contractors, local suppliers and other activities in 2011-12” by mining companies.

The launch of the report comes as federal Infrastructure and Regional Development Minister, Warren Truss, seeks to ease fears in many local governments that they will lose out on money from the Regional Development Australia Fund (RDAF) that was tied to funding from the mining tax MRRT.

The Australian Local Government Association (ALGA) has been agitating for Canberra to make clear its intentions clear over what money allocated under the RDAF program will still flow, especially if councils had budgeted for projects but not yet signed off on contracts.

Last week Mr Truss told delegates at an ALGA roads conference that the government was still “considering arrangements for RDAF projects without a contract in place prior to the election.”

“The Government will abolish the MRRT, as it is another cost to business – but it wasn’t raising much money anyway,” Mr Truss said, adding that money will still flow to projects under contract.

Now the Minerals Council claims it has the proof that the economic benefits it generates and the money it spends easily outweigh what the Mining Tax would have collected and redistributed.

It says that a survey of “25 Australian mining companies, explorers and resources contractors by Corporate Social Responsibility consultants Banarra” shows that industry spending on communities “is many times larger than the projected returns from the MRRT.”

“It also exceeds the industry’s 2011-12 company tax and royalty payments, which Deloitte Access Economics have estimated at $21 billion,” Minerals Council chief executive Mitch Hooke said.

“Community infrastructure spending includes health care centres, education and training, sporting clubs, swimming pools and transport services,” Mr Hooke said.

Councils on the doorstep of the Australia’s minerals boom have for years taken parts of the mining industry to task over practices like establishing closed mining camps that can operate as self-contained economies with little flow-on to local businesses.

Another irritant has been the phenomenon of ‘Fly-In, Fly-Out’ workforces that do not put down roots in communities.

Apart from taxing big profits, the aim of rebalancing the what the previous government regarded as inequities arising from mining activities on many cash strapped regional communities was used as a partial justification for the introduction of the MRRT.

However the Minerals Council now says that its latest research proves the industry is paying its way.

“The size of the community contribution also conclusively demolishes the suggestion that prior to the introduction of the MRRT, Australians were not getting a “fair share” of the mining boom,” Mr Hooke said.

In terms of specifics, the Minerals Council’s report cites “local business development and support” as having the biggest contribution value at $32.1 billion.

It also puts spending on “community infrastructure and services” – such as schools, libraries, museums, healthcare, education and financial systems – at $91.9 million a year.

Miners are similarly keen to emphasise their links with fostering indigenous employment, putting annual spending on “Indigenous Contracting” at $2.2 billion.

The Minerals Council report says those activities include “procurement for services such as rehabilitation, seed collecting, catering, land management, road maintenance, earthworks and cultural awareness training.”

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