A $60m tax bill for Clive Palmer’s Mineralogy may explain his more modest political spend

Clive Palmer and the leader of his Trumpet of Patriots party, Suellen Wrightson. Picture: Getty Images.

There might be a good reason that Clive Palmer halved his spending on this year’s federal election campaign and the Australian Taxation Office could well have played a part in it.

Palmer spent an estimated $60m promoting his Trumpet of Patriots party during the election campaign, but didn’t win any seats. That’s about half the money he spent in 2022, when his then United Australia Party picked up a single senate seat.

Margin Call suspects the spending drop was less a sign of wisdom than some cashflow reduction – in relative terms at any rate – at his flagship private mining company, Mineralogy.

Mineralogy this week lodged its financial report with ASIC for the 2024 financial year and it shows a sharp 30 per cent drop in the company’s annual net profit to $88.5m.

The company makes most of its money collecting royalties from the iron ore mine run by China’s CITIC in Western Australia’s Pilbara region.

The profit drop was not because the iron ore price has fallen, although it has. And not because Palmer has been spending all of his money on lawyers, although he’s still doing his part to keep the profession busy.

In fact, Mineralogy’s pre-tax profit improved from the previous year, up 16 per cent to $206.5m.

By far the biggest hit to Palmer’s bottom line was a massive bill from the tax office.

Mineralogy handed over $117.9m to the federal treasury last financial year – more than double the $51.8m paid in 2023.

The reason? It appears Palmer’s company was hit by a back-tax bill during the year, with Mineralogy noting there was an “uncertainty over tax provision”.

“The uncertain tax treatment relates to the interpretation of how the tax legislation applies to the group’s tax position for which objections have been lodged and are still pending with the Australian Taxation Office. The group had recognised and paid 50 per cent of the primary tax under the agreed arrangements,” Mineralogy said.

The company handed over $34.5m in “overprovision for income tax in prior years”, and said it could be liable for another $30m if the ATO knocks back its objections; although any such decision will undoubtedly end up being challenged in court.

On top of that, Mineralogy had about $21m in previously claimed tax deductions rubbed out, its financial report shows.

It’s not entirely clear what the dispute relates to, and Palmer didn’t respond Wednesday to Margin Call’s query about the matter.

Now, let’s be clear. A $60m tax bill is a drop in the ocean for Palmer. Mineralogy pulled in $413m in royalties for the year and booked another $21m in sundry other revenue.

Even after extending some $205m in related party loans during the year, it was still holding $85m in cash and equivalents at June 30, 2024.

And as for Clive’s political ambitions? He told reporters after Trumpet of Patriots’ spectacular failure in May that he was “getting too old for politics” and would instead concentrate on philanthropy.