The Mining Withholding Tax and the Aboriginals Benefit Account

Abstract

Since 1979 a Mining Withholding Tax (MWT) has been levied on payments made from the Aboriginals Benefit Account (ABA), the statutory account established under the Aboriginal Land Rights (Northern Territory) Act 1976 (ALRA) to receive the equivalents of mining royalties generated on Aboriginal land. The tax has been questioned by successive reviews for more than four decades, and its abolition has been recommended on at least three occasions, without effect. This paper argues that the case for abolition has become materially stronger since the establishment of Aboriginal Investment NT (AINT) in 2021. Drawing on the audited financial statements of the ABA and AINT, it shows that the tax cost the ABA $101.3 million in the seven years to 2024–25; that the amount levied rose by 367 per cent while royalty equivalent receipts fell by 37 per cent; and that in 2024–25 two-thirds of it was levied on the capitalisation of AINT itself. Because the tax is met by the Account rather than deducted from what recipients receive, its incidence now falls wholly on accumulated Aboriginal capital. The paper sets out seven grounds for abolition, estimates the capital removed since 1979 at above $200 million in nominal terms and around $365 million when compounded at the minimal bond yields the ABA could lawfully have earned, and argues that restoration should be framed as an appropriation rather than a tax refund and directed to AINT’s Future Fund. It concludes with recommendations on sequencing, advocacy and the legislative, administrative and legal avenues available. It is the third in a series of papers on the ABA and the future of ALRA.