The Queensland Resources Council (QRC) has called out Treasurer Cameron Dick for failing to acknowledge that the lion’s share of the state’s improved financial position is from the almost $5 billion extra received over budget forecasts through coal company royalty taxes under the previous royalty regime in 2021/22.
QRC Chief Executive Ian Macfarlane said higher international commodity prices had enabled coal companies to contribute a record $7.29 billion in the last financial year, almost three times higher than the $2.6 billion originally forecast.
The record contribution of coal royalties to the state’s bottom line is also three times more than the roughly $2.4 billion in extra revenue generated from increased stamp duty and payroll taxes widely spruiked by the Treasurer this week.
Mr Macfarlane said the budget update proves what the resources sector has been saying all along – that the government’s previous royalty regime was already delivering a massive increase in prosperity to Queensland.
“There was absolutely no need to jeopardise the sector’s future by increasing royalty taxes in the last state budget,” he said.
“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,” he said.
“The Treasurer’s decision this financial year to suddenly increase coal royalty tax rates to the highest rates in the world has shocked companies and investors and seriously damaged our industry’s competitiveness and reputation.
The government’s unbelievable move to increase the top coal royalty tax rate from 15 to 40 percent, 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.
Considering the latest economic data shows how reliant the Queensland economy and employment is on the continuing prosperity and stability of the resources sector, this is a very concerning direction for the government to take.
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.
Already, Australia’s biggest mining company BHP has followed the Japanese government in expressing serious concerns about future investment plans for Queensland as a direct result of this tax hike.
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.”