Gina Rinehart says federal taxation revenue from mining more than covers the salaries of all of Australia’s police, teachers and nurses. Is that correct?

Gina Rinehart says federal taxation revenue from mining more than covers the salaries of all of Australia’s police, teachers and nurses. Is that correct?
  • PublishedDecember 20, 2023

The claim

Australia’s richest woman Gina Rinehart is a passionate advocate of the benefits that mining and farming has brought to Australia.

In a November 21 article written for Sky News, she extolled the legacy of miners and farmers and noted:

“Federal taxation revenue from our mining companies alone for the last financial year more than covers the cost of salaries of all of Australia’s police, teachers and nurses.”

Is the amount of federal corporate tax paid by mining companies greater than the combined cost of salaries for all police, teachers and nurses?

RMIT ABC Fact Check investigates.

The verdict

Mrs Rinehart’s claim doesn’t stack up.

Data from the Australian Taxation Office shows that the mining industry paid $42.2 billion in federal corporate taxes in 2021-22, the last financial year for which data is available. In 2020-21, the figure was $32.3 billion.

While there is no single dataset covering the combined cost of salaries for all teachers, nurses and police in the last financial year, the available data suggests that, excluding private school teachers, these professions were paid upwards of $68.7 billion in 2020-21.

Data for private schools is produced on a calendar year basis, but including the 2021 figure for teacher salaries would add another $12.7 billion to the total.

And even when private school teachers and nurses working outside of public hospitals are excluded from the calculation, the total only falls to $55.3 billion.

Separately, data collected by the ATO shows that income reported by individuals working across all three professions in 2020-21 totalled $61.6 billion.

In either case, the two higher estimates only cover about 80 per cent of nurses working in Australia.

A close-up shot of a geologist's hand tossing an iron ore core sample in a sieve.
Corporate tax from mining is a large source of revenue for the federal government, but the data shows it’s not larger than the combined salaries of police, teachers and nurses.(Reuters: Tim Wimborne)

Assessing the claim

Mrs Rinehart referred to “all of Australia’s police, teachers and nurses”, which Fact Check takes to mean all state, territory and federal police officers; all registered and enrolled nurses; and all primary and secondary school teachers, including those working in special education.

Since taxpayers subsidise the cost of private health and education, and Mrs Rinehart made no distinction between the public and private sectors, her claim is also taken to include teachers working in private schools and nurses working in private healthcare settings.

Two police officers at Flinders Street Station in Melbourne.
How much do Australia’s police cost?(ABC News: Margaret Burin )

As a baseline, Fact Check has focused on salaries and wages for:

  • Registered nurses (public and private)
  • Primary and secondary school teachers (public and private)
  • State and territory police officers

In her article, Mrs Rinehart said her comparison was limited to “federal taxation revenue”, which specifically excluded “state royalties and other taxes”.

The Minerals Council of Australia has suggested that mining companies paid $23.8 billion in mining royalties to the states in 2020-21.

Source of the claim

A large gold nugget sits on a plastic scoop.
Mining revenue makes an outsized contribution to the federal coffers. But is it greater than the cost of police, teacher and nurse salaries?(Supplied: AAP)

When contacted by Fact Check, a spokesman for Mrs Rinehart’s company Hancock Prospecting said her claim was based on data collected from the Australian Taxation Office (ATO), the Australian Curriculum, Assessment and Reporting Authority (ACARA) and the Department of Health.

According to the spokesman, total corporate tax paid by the mining sector to the federal government during the last financial year was $42.4 billion.

Meanwhile, the total annual wages and salaries of “primary and secondary teachers (including special needs teachers), all nurses and police officers” amounted to $41.8 billion.

Some of the wages and salary data included in this figure could be inflated by employees earning additional income outside of their primary occupation, the spokesman added.

What the source data shows

Mrs Rinehart’s figure for tax paid by mining companies comes from the ATO’s Corporate Tax Transparency report for the 2021-22 financial year, which is the latest financial year with available data.

According to the report’s highlights, “large corporates paid a record $83.8 billion in income tax in 2021-22”, of which “the Mining, Energy and Water segment” accounted for $42.4 billion (50.6%).

The comparable figure for the previous year, 2020-21, was $32.3 billion.

Data from the other sources cited by Mrs Rinehart’s spokesman were harder to pin down.

However, the most recent ACARA data shows that salaries for public school teachers cost $26.5 billion in the 2020-21 financial year, while those for private school teachers during the 2021 calendar year (from all sources) totalled $12.7 billion.

No single dataset

David Hayward, an emeritus professor of public policy with RMIT University, told Fact Check that when it came to salary data, there was no single source that covered all three professions.

For teachers and police data, he recommended using the Productivity Commission’s Report on Government Services.

As with Mrs Rinehart’s federal taxation source, the commission’s latest police data covers 2021-22, though its data for school teacher wages only goes to 2020-21.

The data shows that “employee-related expenditure” on public primary and secondary teachers was $26.5 billion, matching the earlier ACARA figure for public schools.

According to Fact Check’s calculations, which relied on the commission’s average annual “salaries and payments” figure, the nation’s 59,085 state and territory police officers cost a total of roughly $9.8 billion in 2021-22 (and $9.4 billion in 2020-21).

The nursing data

A nurse fixes the breathing tube of a baby
What do the salaries of all of Australia’s nurses cost?(ABC News: Danielle Bonica)

For nursing figures, Professor Hayward suggested using 2021 employment data published by the federal government in its Labour Market portal.

The portal, which is being transferred to the new Jobs and Skills Australia website, estimates that the 325,500 registered nurses employed in 2021 made an average wage of $100,724 per year. This equates to a cost of roughly $32.8 billion.

That figure includes registered nurses working in hospitals and other settings, such as aged care, and doesn’t distinguish between public and private employers.

Salaries for the 181,000 nurses employed only in the nation’s public hospital system cost $19.4 billion in 2020-21 and $20.9 billion in 2021-22, according to data from the Australian Institute of Health and Welfare.

On average, wages for registered nurses accounted for more than 90 per cent of either total, according to data available for most states.

Bringing it all together

Mrs Rinehart claimed that the $42.4 billion in company tax paid by mining companies in 2021-22 was greater than the combined cost of salaries for all police, teachers and nurses.

But even looking only at sworn police officers, nurses in public hospitals and teachers in government schools, the total cost of wages and salaries was $55.3 billion in 2020-21.

https://datawrapper.dwcdn.net/wsQBU/1?abcnewsembedheight=600&dark=false

Substituting in all registered nurses (regardless of workplace) would take the figure to $68.7 billion, noting that registered nurses still only account for around 80 per cent of all nurses working in aged care, hospitals, private care and elsewhere.

And that’s before considering the $12.7 billion for private school teacher salaries in 2021.

Income tax data

Separately, the Australian Taxation Office publishes data on income reported by individuals, which Greg Jericho, the chief economist at the Australia Institute, suggested using to calculate salaries for police, nurses and teachers.

A spokeswoman for the ATO confirmed that its data would include income earned outside of the main profession declared.

The latest figures, which cover the 2020-21 financial year, show that the total “salary or wages” earned by police, teachers and registered nurses was $61.6 billion.

“If you only count primary school teachers, nurses and police you get to $43.8 billion — which gets close to [Mrs Rinehart’s] number,” Dr Jericho said. However, he noted that excluding teachers after primary school was “not quite all”.

Does the comparison make sense?

Experts contacted by Fact Check said Mrs Rinehart’s linking of mining tax revenue with the costs of essential services wasn’t a useful way to think about taxes.

“Our taxes, for the most part, are not hypothecated to particular uses so it’s sort of a silly comparison,” said Robert Breunig, director of the Tax and Transfer Policy Institute at the Australian National University’s Crawford School of Public Policy.

“The taxes we charge on corporations are not benchmarked against the salaries of police, teachers and nurses. If we paid police, teachers and nurses less money, this would not flow through to lower corporate taxes.”

Mining bonanza

There’s no doubt that mining companies make an outsized contribution to the federal government’s coffers, and 2022 was no exception.

As noted by a statement accompanying the release of the ATO’s corporate tax transparency report: “The 2022 income year was the first year that the mining sector paid more tax than all other sectors combined, something we haven’t seen in the history of the [corporate tax transparency] report.”

The report points out that commodity prices and export volumes have been additional factors behind the mining sector’s recent contribution.

Indeed, the sector has had two years of record earnings, with fallout from the Russian invasion of Ukraine coupled with the strength of the US dollar helping deliver an estimated record $460 billion in earnings for Australian exports of resource and energy commodities in 2022–23, according to the June 2023 quarterly review from the Department of Industry.

But, the review added, these earnings are expected to fall over the next two years as energy prices go back toward levels traded before the Russian invasion of Ukraine.

SOURCE: ABCNEWS

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