‘Completely got it wrong’: QRC report finds new holes in controversial coal tax hike
Queensland Resources Council chief Ian Macfarlane says the government “completely got it wrong” after a report found a key claim regarding its new royalty regime to be false.
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Queensland’s controversial new royalty regime would have stung nearly 60 per cent of all steelmaking coal exported in the last decade, a report has found, striking at the Treasurer’s claim only short periods of “super profits” would be impacted.
The Queensland Resources Council has used the release of the report, which it commissioned, to reiterate it would not be backing down on its opposition of the royalty regime introduced by the state government at the recent budget.
QRC chief executive Ian Macfarlane also made clear the mining peak body had not ruled out political campaigns to get its way.
The state government has defended the royalty regime as justified considering how much profits are being pulled currently by coal companies — like New Hope Group which confirmed on Tuesday it posted a net profit after tax of $983m in 2021/22, up from $79.4m the year before.
The report, from Commodity Insights, also further throws into question Treasury’s estimates that the new royalty regime would rake in just $800m extra in the 2022/23 financial year.
A range of estimates, from the conservative projections of Westpac to the higher end forecast of the Commonwealth’s Office of the Chief Economist, put the money raised this financial year between $2.9bn and $7.5bn.
“I think the Government has just completely got it wrong. If $1.2 billion is their target for the next four years they’ve already got that in their pocket,” Mr Macfarlane said.
“So the question comes back, why do all this damage to future investment and jobs in this state to your biggest export industry when you’ve got the money you need?”
The Commodity Insights report found 56 per cent of metallurgical coal exported from Queensland in the last decade would have attracted the new higher royalty rates had the schedule been around.
“This is clearly not just a royalty that applies to periods of super-prices and super-profits,” it stated.
A spokesman for the Treasurer said the forecast returns from the new royalty arrangements were based on coal price modelling from Treasury and was aligned “with forecasts used by coal companies when planning investments”.
“If prices perform higher than forecast, 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,” he said.
The report comes amid Treasurer Cameron Dick’s trade mission to economic powerhouses in the Asia Pacific, including Japan where he will meet with major resource industry players — though he denied it was to save face after the royalty change caused a diplomatic rift with Japan.
Japan’s embassy has previous said it wants the State Government to consult more closely with Japanese businesses and find a “mutually acceptable solution” to the schism caused by the coal tax.
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Originally published as ‘Completely got it wrong’: QRC report finds new holes in controversial coal tax hike
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