How Australia charges for what it owns. One levy on the sale value of the ore, at marginal rates set per commodity and stepped by the market price at the time of sale — replacing eight state royalty regimes, the Petroleum Resource Rent Tax, company tax on extraction and the Commonwealth offshore boundary. One system, divided where it is collected.
Australia had the largest mining boom in history and emerged with $600 billion in federal debt. The PRRT collected almost nothing from LNG. Royalties are fixed regardless of price. Windfall pricing during the supercycle was captured by shareholders, not Australians.
The multinational pays a profit tax engineered to zero. The Pilbara miner pays full income tax on every dollar. Unions are pushing back. Strike risk is rising. The deal has never been fair — and the people who do the work know it.
Labor is talking about taxing gas harder. The Greens want windfall taxes. Somebody is going to redesign Australian resource taxation. The question is whether it will be done fairly — with a coherent design — or whether it will be a series of opportunistic grabs that drive investment offshore without solving the problem.
Not a tax grab. A deal. Cheap power to the mine gate, sovereign water, fast approvals, a published schedule a project can model for thirty years. In return: one levy on the sale value of the ore, calculated in one line. The miner gets certainty. The state gets a reason to want development. The Traditional Owner gets a legislated share instead of a fight. The nation gets the infrastructure it never built.
Charged on the sale value of the ore at first arm's-length sale, with no deductions. The bands are marginal, like income tax — a floor band, a base band, a high band and a peak band, set per commodity against what that commodity can carry — peaking at 20 per cent on nickel, 38 on gold, 50 on iron ore, 55 on gas and oil and 65 on coal. Nobody pays the top rate on their whole revenue; across the whole schedule the effective rate is 25.4 per cent. Thresholds are set as multiples of each commodity's ten-year average price, so they index themselves; the band that applies is set by the market price on the day of sale. One rate schedule replaces eight state royalty regimes, the PRRT, company tax on extraction, and the Commonwealth offshore boundary.
$103.7 billion a year at current prices, against $63.9 billion today — counting every state royalty, the PRRT and company tax on extraction. That is 25.4 per cent of the $408 billion of ore and gas sold. The single largest correction is gas and oil, which return about 4.7 per cent of their export value to the public today against 7.5 per cent for iron ore and above 20 per cent for Queensland coal.
SBC corridor power delivered at 6c/kWh to every mine gate. Today's industrial power is closer to 15c. The cost reduction more than compensates the miner for the gross-revenue levy. The deal works because the infrastructure works.
Alice Hub water and SBC corridor water available to mining operations along the corridors. Reliable, sovereign, priced fairly. Water security is a precondition of mining — and Australia has the natural endowment to provide it from the monsoon north.
One system that divides what it collects, at the point of collection, by a formula in the Act. 73% to the Commonwealth (the SBC, debt reduction, the sovereign wealth fund). 25% to the state or territory the ore came from, on its own production and its adjacent offshore area — replacing the royalty it collects today, not stacked on top of it. 2% to Traditional Owners, legislated into the Traditional Owner Services Fund and paid automatically. No annual negotiation between governments about the result.
Federal mine approvals legislated to 6 months maximum. Environmental review, native title clearance, financial assurance — all parallel, not sequential. State approvals timed to federal timeline. Approvals do not become an extraction tax by another means.
Australia produces 320 tonnes of gold per year and holds 80 tonnes in sovereign reserve. Sovereign Australia increases the sovereign holding annually from domestic production. Gold in the vault is the floor under the currency in any future crisis.
REL revenue net of debt service and SBC capital flows to a constitutionally-protected Sovereign Wealth Fund. Modelled on Norway's. Invested abroad, never spent, returns funding future generations. The mining boom built no Australian institution. The REL builds one for every Australian born from 2027.
| Current — Failing | Sovereign Australia — The Deal |
|---|---|
| PRRT collects almost nothing from LNG. Profit engineering legal. | REL on the sale value of the ore. No deductions, so there is nothing to engineer. |
| Royalties fixed regardless of price. Windfall capture lost. | Four marginal bands per commodity. The rate rises with the price and falls with it. |
| Mine approvals: 5–10 years. | Mine approvals: 6 months legislated. Environmental + native title in parallel. |
| Gas and oil return 4.7% of export value to the public. | Gas charged like everything else — $22.0B a year against roughly $3B now. |
| Royalties to states, federal-state argument annually. | 73/25/2 divided at the point of collection, by a formula in the Act. |
| Traditional Owners negotiate project by project, in confidence. | 2% — about $2.07B a year — legislated into the Traditional Owner Services Fund. |
| Eight state royalty regimes, plus a separate Commonwealth system offshore. | One schedule, one calculation, one payment — the same either side of the boundary. |
| $600B debt after the largest boom in Australian history. | REL surplus pays down debt and seeds Sovereign Wealth Fund. |
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No memos pinned to this policy yet. When a Sovereign Australia memo on this topic is published, it will appear here with a short summary. The full memo index is at sovereignaustraliaparty.com.au/memos.html.