Does the mineral wealth in our soil and beneath our ocean belong to Australians or to mining companies and their shareholders?
asserted
wealth → belong → companies
Prosper Australia, a tax reform think tank, says this country has a resource tax and royalty problem.
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country → say → problem
It estimates Australia is losing $45 billion a year in potential revenue because it is failing to collect more from the extractive mining and gas industries when commodity prices boom and profits surge.
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profits → estimate → industries
It says we need to fix our tax system's "boom sensitivity" so public revenue rises automatically when public resources generate windfall gains.
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resources → say → gains
"Once coal, iron ore, or gas is extracted and sold, it is gone," the organisation says.
"
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organisation → extract → ?
Companies invest capital, technology, and expertise to extract these resources, and they should earn a commercial return.
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they → invest → return
"But they do not create the underlying resource, so when resource prices and profits surge, the public should share properly in the upside.
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public → create → upside
"There is a clear public demand for Australia to rapidly modernise its public-capture mechanisms before more finite public wealth is extracted without a fair public return."
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wealth → be → return
The organisation released a report last week, Australia's resource wealth giveaway: How weak public capture leaves billions in revenue on the table.
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capture → release → table
It compares Australia's resource tax and royalty system against selected resource-rich peers, including Norway, Alaska, Chile, Peru, Québec, and Queensland's coal sector specifically (given Queensland's recent tax changes).
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It → compare → changes
It asks three questions about Australia's resource tax regime:
- Is the system designed to collect more when prices and profits surge?
- What level of revenue does the public actually collect?
- Does stronger public capture automatically drive investment away?
It says if Australia's system had better boom sensitivity, it would collect around $45 billion more every year across state and Commonwealth revenue streams, as it rode the global commodity price cycle.
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it → ask → cycle
It estimates Australia would collect an extra $28 billion a year from "mining" activity (coal, iron ore, gold, copper, lithium and other miners), and $16 billion to $18 billion from the "petroleum" sector (oil, gas and LNG).
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Australia → estimate → sector
International comparisons
The report asks: for every dollar of value created by the resource sector, how much was collected by the public?
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much → ask → public
It then compares Australia's "public-capture ratio" with some of its global peers.
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It → compare → peers
It shows that Australia's public-capture ratio for petroleum is very weak compared to Norway and Alaska.
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ratio → show → Norway
It makes the point that Norway's mixed state-participation model is very different to Australia's private-operator model, so to make Norway's public-capture ratio more comparable with Australia's, it removes state-participation activity from Norway's numbers (it makes other adjustments for Alaska).
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it → make → Alaska
It shows Australia's mining result is stronger relative to peers, but it could be much stronger, as Queensland coal shows.
uncertain
coal → show → peers
"Australia's mining-only public-capture result is stronger than might have been expected," the report says.
uncertain
report → expect → ?
"It is higher than the observed ratios for all three selected international mining peers: Quebec, Chile, and Peru.
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It → observe → peers
"That is surprising because Australia's mining design relies heavily on low and flat royalties, while those peers have more boom-sensitive mining regimes.
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peers → rely → regimes
"[But] this result does not mean Australia's mining royalty design is optimal or that the status quo should remain."
The report says several factors may help to explain the result.
uncertain
factors → mean → result
"Actual collection depends on commodity mix, price cycles, project maturity, and cost structures," it says.
"
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it → depend → mix
Australia's mining sector includes large, mature, high-volume iron ore and coal production.
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sector → include → production
Quebec, Chile, and Peru have different commodity mixes and cost structures.
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Quebec → have → mixes
"Differences in tax administration and compliance may also affect observed collections.
uncertain
Differences → affect → collections
"
How different designs respond to a boom differently
The report says not all royalties or taxes respond to resource booms in the same way, and some tax designs can appear good on paper but perform badly.
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designs → respond → paper
For example, it says Australia's Petroleum Resource Rent Tax (PRRT) was designed to tax super-profits from offshore petroleum projects, so its boom sensitivity design is high.
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design → say → projects
But it has failed to produce strong and timely revenues, and current forecasts show no sustained improvement.
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forecasts → fail → improvement
"Australia's experience of the PRRT does not mean super-profit taxes cannot work," the report says.
"
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report → mean → PRRT
But it does show that design rules matter and if these are too generous or complex, a resource rent tax can look strong on paper while collecting much less in practice.
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tax → show → practice
"
Queensland coal is the proof point
The report says recent tax changes in Queensland show that much stronger boom-sensitive public-capture is possible in Australia.
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capture → say → Australia
Since July 1, 2022, Queensland's coal royalty scheme has had highly progressive price bands.
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scheme → have → bands
Its coal royalty rate rises in several steps with price: from 7 per cent at lower coal prices, to 40 per cent once coal prices exceed $300 a tonne:
- 7% on the first $100/t
- 12.5% on the portion from $100-$150/t
- 15% on the portion from $150-$175/t
- 20% on the portion from $175-$225/t
- 30% on the portion from $225-$300/t
- 40% on the portion above $300/t
Prosper Australia says that kind of royalty schedule is much more "boom-sensitive" than a flat royalty.
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kind → rise → royalty
What happened when the new tax schedule was introduced?
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schedule → happen → ?
In three years since July 2022, the number of active coal mines in Queensland increased from 53 in 2021–22 to 60 in 2024–25.
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number → increase → 2024–25
The state's coal employment remained around 26,000 workers on a four-quarter average basis, and its saleable coal was "particularly stable", the report says.
Prosper Australia says that evidence is important.
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evidence → remain → basis
It says arguments have recently been mounting against Queensland's royalty regime — particularly since some mine operators in Queensland began cutting jobs in 2025 and reducing production, blaming higher royalties, alongside falling coal prices and rising costs.
But it says even under a well-designed, boom-sensitive royalty regime, some mines will become uneconomic when global prices fall, costs rise, or deposits mature.
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deposits → say → regime
The latest Queensland government figures show there were 58 active coal mines in Queensland in 2025–26.
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figures → show → 2025–26
Low royalties are a policy choice
Overall, the report makes two suggestions.
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report → make → suggestions
It says Australia should modernise its royalties system and address its petroleum under-capture, while allowing viable resource projects to earn a commercial return.
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projects → say → return
…and 5 more, not listed.
The Aporia