Own BHP shares? Here's how much the ASX 200 giant added to the Aussie economy in FY22

The company expects to fund around 10% of all Australian company tax for FY22.

| More on:
A fit woman stands on a hill facing the water at dawn with open arms embracing the future

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • BHP directly contributed $79.3 billion to the Australian economy in financial year 2022
  • That includes $18.5 billion of taxes, royalties, and other payments made to governments
  • It also includes the $39.6 billion of dividends handed to investors over the period

The financial year 2022 (FY22) was a good year for those invested in BHP Group Ltd (ASX: BHP) shares.

The S&P/ASX 200 Index (ASX: XJO) materials monolith delivered record free cash flow and offered investors $4.63 per share of dividends for the 12 months ended 30 June 2022.

But it wasn't just the company's shareholders that benefited from the company's strong performance.

It added tens of billions of dollars to the Australian economy in FY22.

Let's take a closer look at the economic value the 'Big Australian' brought to the nation last fiscal year.

BHP contributes $79.3b to the Aussie economy

The BHP share price outperformed the ASX 200 last financial year, falling just 3.9% over the period compared to the index's 10% tumble. Factoring in the company's dividends, investors boasted a $2.94 per share return over the 12 months ended June.

But the resources giant brought a far bigger benefit to the broader economy – one to the tune of $79.3 billion.

That's right, between taxes, wages, social investments, and other payments, the company contributed $79.3 billion to the Australian economy in FY22. Let's break that down.

BHP paid $18.5 billion of taxes, royalties, and other payments to governments last fiscal year at an adjusted effective tax rate of 42.7%, including royalties.

According to BHP's latest Economic Contribution Report, that makes it one of the nation's largest corporate taxpayers.

The company expects to account for around 10% of all Australian company tax paid last financial year. Meanwhile, BHP-operated projects appear to have contributed 9% and 13% of all revenue, excluding grants, in Queensland and Western Australia, respectively.

It also spent $16.5 billion with suppliers and paid out $4.6 billion in employee wages in financial year 2022. BHP has nearly 50,000 employees and contractors in Australia.

Another $106 million was put into the company's social investments.

Finally, it counted the $39.6 billion worth of dividends offered to shareholders and investors as another economic benefit.

Its latest annual economic contribution adds to the company's impressive decade-long tally. BHP has paid around $90.1 billion in taxes, royalties, and other payments to Australian governments over the last 10 years.

BHP share price snapshot

FY22 saw a strong performance from the BHP share price, but its fortunes have since changed.

The iron ore giant's stock has fallen 12% since the start of 2022. It's also currently 11% lower than it was this time last year.

For comparison, the ASX 200 has dumped 10% year to date and 9% over the last 12 months.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A man stands with hands on hips surveying construction of three high-rise buildings.
Materials Shares

Building activity on the rise – will ASX materials shares benefit?

New data from the March quarter shows a sharp rise in building activity. 

Read more »

Man smiling at a laptop because of a rising share price.
Materials Shares

Macquarie predicts 11% upside for this ASX materials stock

Here's why the broker is positive on the stock.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Rio Tinto share price falls on Q2 update

Let's see what the mining giant reported for the second quarter.

Read more »

a man in a hard hat and high visibility vest smiles as he stands in the foreground of heavy mining equipment on a mine site.
Materials Shares

Could these 3 ASX materials shares be set to double?

This broker has buy ratings and aggressive price targets for these holdings. 

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Materials Shares

Rio Tinto shares on watch after naming new CEO

The mining giant has found its new leader.

Read more »

Three miners looking at a tablet.
Materials Shares

How much upside does Macquarie project for South32 shares?

The miner faces more headwinds, but the broker maintains its optimism.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Why are South32 shares sinking 5% today?

Let's see what is weighing heavily on this mining giant's shares today.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Materials Shares

How much upside does Macquarie forecast for Pilbara Minerals shares?

Is the broker bullish or bearish on this lithium giant? Let's find out.

Read more »