Miners urge company tax cut to spark investment boom

Miners have told Scott Morrison a cut to the 30 per cent company tax rate could unleash a $100bn ­investment boom in resources projects.

Minerals Council chief Tania Constable says the government must seize the ­opportunity for ‘pragmatic and targeted reforms to fast-track Australia’s recovery from COVID-19’.. Picture Gary Ramage

Miners have told Scott Morrison a cut to the 30 per cent company tax rate could unleash a $100bn ­investment boom in resources projects across the country.

The call from the Minerals Council of Australia ahead of the Prime Minister’s post-COVID-19 economic recovery speech on Tuesday comes as the building ­industry warns the government it is in deep trouble and needs an ­urgent stimulus package.

Master Builders Australia, representing the nation’s $220bn building and construction industry, said 73 per cent of its members had reported an average drop in forward work of 40 per cent.

It commissioned consultancy group EY to model a five-program stimulus action plan across the residential, commercial, civil infrastructure building sectors as it calls for government intervention to the tune of up to $13.2bn.

Mr Morrison said on Sunday he would work with states, territories, businesses and unions to lead a jobs boom and repair the COVID-19 economic damage.

“The other curve we have to work on is the jobs curve and we need to do things that create jobs. And what I’m interested in doing is working with anyone in this country who wants to work with me to create jobs,” he said.

“I’m not interested in ideology. I’m not interested in all those other things. I’m just interested in getting Australians back into jobs.

“Any premier, any chief minister, any union leader, any business leader, anyone who wants to work with me to create jobs, we’ve got a partnership. And that’s the way I’m going to proceed, whether it’s on workplace relations, industrial relations, whether it’s on skills ­development, whether it’s how we get finance to businesses.”

MCA chief executive Tania Constable, who represents major miners including BHP, Rio Tinto, Glencore and Whitehaven, said the government must seize the ­opportunity for “pragmatic and targeted reforms to fast-track Australia’s recovery from COVID-19”.

Responding to Mr Morrison’s calls to create new jobs, she said the industry was ready to accelerate 1000 new apprenticeships through the Mining Skills Organisation Pilot program.

“With fierce competition expected in global resources markets as the world emerges from COVID-19, Australia’s potential $100bn mining investment pipeline can’t be taken for granted,” Ms Constable said.

“Lower taxes, faster project ­approvals, modern skills and flexible workplaces will help the minerals industry play an even bigger role in supporting all Australians by funding vital services and infrastructure.

“Australia’s company tax rate of 30 per cent is too high and not internationally competitive.”

The MCA said “expediting ­environmental assessments and approvals, reforming greenfields agreements and expanding incentives for exploration” would help unlock the pipeline of new and ­expanding mining projects across Australia.

Ms Constable also warned the government not to increase the “already high burden’’ on the ­mining sector.

“In particular, the fuel tax ­credit scheme, which operates to avoid taxing a vital business input, should remain in its current form,” she said.

The call from the mining sector comes as builders have called for $13.2bn in stimulus support ahead of the October 6 budget.

It said a package of this size would drive $30.9bn in increased GDP, create 105,465 jobs in construction and across the economy, and drive a $17.6bn expansion in construction activity.

The building industry is also calling for a $10bn social and ­affordable housing fund and is urging the national cabinet to set up an industry taskforce led by a co-ordinator to oversee the implementation of its stimulus plan.

MBA chief executive Denita Wawn said the industry wanted “stimulus, not subsidies, so businesses can stay working and ­people keep their jobs”.

“For every one dollar spent in building and construction you get the benefit of three dollars in the wider economy, so this package will deliver massively for other industries and the community,” Ms Wawn said.

She said until construction ­activity resumed there was no stimulus so “we need a national cabinet taskforce to overcome the current disjointed approach to building and construction among the federal and state governments”.

“The experience from previous downturns shows our industry takes four times longer than the rest of the economy to recover,” Ms Wawn said.

Other sectors are also pushing for tax reform, with the hospitality industry calling for an overhaul of fringe benefits and payroll tax.

Australian Automobile Association managing director Michael Bradley said the government needed to overhaul its road-user charges system, citing concerns that receipts from fuel excise would sharply fall in coming years as the take-up of electric vehicles increased.

“This is going to seriously dent the government’s ability to re­invest motorists’ money in roads and public transport,” Mr Bradley said.

“The government is going to have to plan for new forms of road-user charging, and that conversation needs to ramp up at this time when the federal government is showing leadership by having a frank discussion with Australians about economic reform and our economic challenges.”

A statement endorsed by 15 business, union, energy, conservation, property and charity groups calls for “COVID economic recovery to urgently stimulate jobs and to rebuild a sustainable and strong economy”.

The groups, including the Australian Industry Group, ACTU, Property Council of Australia, ACOSS and Australian Conservation Foundation, said any “economic recovery efforts” should focus on long-term challenges headlined by the transition to zero net emissions.