Lobby slams coal hike
A major mining looby says the Queensland Government’s coal royalty hike is damaging the industry and killing investor confidence.
A new report commissioned by the Queensland Resources Council (QRC) has reviewed the impact of the government’s decision to add three new coal tax tiers – with significantly higher royalty rates – to the previous regime.
The state brought in the new tiers following a 10-year freeze on coal royalty rates and amid soaring coal prices. The changes mean royalty rates rise from 15 per cent for prices above $300 per tonne to 40 per cent.
The changes were made to add an additional $1.2 billion to the state's coffers over four years, which the state government says will be invested in regional Queensland.
Queensland Resources Council (QRC) chief executive Ian Macfarlane - a former federal mining minister in the Howard government - says the state collected that $1.2 billion in just three months of the new royalty rates.
The QRC-commissioned report says the Queensland Treasury's estimates were based on conservative coal price forecasts, and could bring in royalties between $6.9-11.9 billion higher than the department predicted.
“[That's] wildly exceeding their predictions,” Mr Macfarlane said.
“They now have to justify why they've … doubled the tax to a point where investment in future mining operations in things like hydrogen is now in jeopardy.
“Why have they done that if their figures show that they've already collected, in the three months of this financial year, everything they expected to collect in the four years of their budget?
“The mining industry is now seeing that our direst predictions are actually true.
“Firstly, that there'll be a vast amount of money collected from the industry which will impact on its viability, but also on investor confidence in investing in new projects.”
Queensland Treasurer Cameron Dick says any additional royalties generated “would only be a fraction of the windfall profits that coal companies would be making from the resources owned by the people of Queensland”.
Opposition to the rates hike is coming from overseas too, with Japanese ambassador to Australia Shingo Yamagami warning the changes carry “so much risk” and are affecting the trust Japanese investors have in Australia.
Mr Dick has pointed out that Indonesian coal producers are currently paying higher royalty rates than companies mining in Queensland.
“Forecast returns from Queensland's new bipartisan progressive royalties arrangements are based on coal price modelling by Queensland Treasury, and align with forecasts used by coal companies when planning investments,” his spokesperson has told reporters.
“Regional Queenslanders deserve to see the benefit of high prices.”