The Queensland Resources Council (QRC) has criticised Treasurer Cameron Dick for not recognising that the lion’s share of the State‘s improved financial position is due to nearly $5 billion in extra revenue received over budget forecasts from coal company royalty taxes under the previous royalty regime in 2021/22.
QRC CEO Ian Macfarlane stated that rising international commodity prices enabled coal businesses to contribute a record $7.29 billion in the previous fiscal year, over three times the $2.6 billion originally projected.
According to QRC, the historic contribution of coal royalties to Queensland’s bottom line is also three times greater than the approximately $2.4 billion in additional revenue generated by increased stamp duty and payroll taxes, which the Treasurer has prominently promoted this week.
Macfarlane said the budget update demonstrates what the resources sector has been saying all along: the previous government’s royalty scheme was already providing enormous increases in prosperity to Queensland.
“There was absolutely no need to jeopardise the sector’s future by increasing royalty taxes in the last state budget. The inconvenient truth for Cameron Dick is that royalty taxes paid by resources companies to the State Government go up when commodity prices go up — that’s how the previous system worked, and it was working well,” Macfarlane stated.
Macfarlane added that this fiscal year, the Treasurer’s decision to abruptly raise coal royalty tax rates to the highest rates in the world stunned entrepreneurs and investors, severely reducing our industry’s competitiveness and image.
“The government’s unbelievable move to increase the top coal royalty tax rate from 15 to 40 per cent, almost overnight and without consultation, has put a black mark against Queensland’s name as a safe place for resources companies to invest, which poses a serious threat to jobs and future growth in our sector across all commodities, not just coal,” he said.
According to Macfarlane, Given how dependent the Queensland economy and employment are on the continued success and security of the resources sector, this is a very troubling direction for the government to follow.
“Companies will vote with their feet and shift capital to other resources destinations around the world, or even within Australia, that offer a much better return on what can be literally billions of dollars’ worth of investment – investment and jobs that will no longer come to Queensland,” Macfarlane stated.
He added that the largest mining corporation in Australia, BHP, has already joined the Japanese government in raising severe doubts about upcoming investment plans for Queensland as a direct result of this tax increase.
“The entire resources sector feels under threat from the State Government’s coal tax increase, not just the coal industry, which means the potential loss of thousands of jobs and economic opportunities, with regional Queensland to be hit first and hardest,” Macfarlane said.
