Regions raise royalties row: Claims southeast taking lion’s share

The resources industry has sunk $66bn into Queensland’s bottom line over the past decade, with the regions claiming to keep the state alive but arguing the money returned was “minuscule”.

Royalties from resources alone over the past decade in Queensland could have built 50 new hospitals and more than 700 new primary schools, employed up to 640,000 police officers and covered the cost of hosting the 2032 Olympic and Paralympic Games nine times over.

The industry has sunk a whopping $66bn into Queensland’s bottom line over the past decade – making up more than 10 per cent of total revenue, a Courier-Mail analysis of historical budget documents found.

This story is part of The Courier-Mail’s special Future Queensland: Resources series that reveals the truth about the contribution the much-maligned resources industry makes to Queensland. You can read all of our coverage on the special topic page here.

But mining communities are still battling to reap the rewards of their region’s fortunes to improve roads and healthcare.

Industry heavyweights and local leaders are calling for more transparency on where royalties from the mining industry are going with almost $30bn more in royalties expected to be pocketed by the government over the next three years – of which two thirds will come from coal.

Mackay Mayor Greg Williamson said the state government’s pursuit of royalties from big mining and resources companies without publicly revealing where the money went “smacks of arrogance”.

“They’re putting billions into the state’s profits and it’s really difficult to understand where it’s spent,” he said.

Mr Williamson said major roads like the Bruce and Peak Downs highways, which serviced royalty generating regions, had not had enough money allocated for upgrades.

Mackay Regional Council Mayor Greg Williamson. Picture: Heidi Petith

“The Bruce Highway is a goat track between certain areas – Rockhampton and Mackay, and Mackay and Townsville, and Townsville to Cairns,” he said.

“The Peak Downs Highway has about 90 kilometres without even a passing lane and I can tell you, in certain hours of the day, traffic is worse than Coronation Drive (in Toowong).”

The $66bn in royalties could have built 50 hospitals based on the $1.3 billion cost of the new Toowoomba Hospital, 730 new primary schools based on the $90m budget for the new Park Ridge primary school and 640,000 police officers taking into account their average salary.

It would cover the $7.1 billion venue infrastructure program for the 2032 Olympic and Paralympic Games nine times over.

Mr Williamson described looming state government cost-of-living relief measures like the 50 cent flat rate public transport fares for six months, at a cost of $150m, as “blatant pork-barrelling”.

“When you look at the makeup of the state parliament, most of the seats are in southeast Queensland, and that’s where the money is going to be spent,” he said.

“We’ve been banging on the door about expanding our health services for years.

“It just makes regional Queenslanders more irate, when we know that this is a region that produces, not just for the Queensland economy, for the national economy.”

Mr Williamson said ongoing lack transparency over royalties could “hamper future investment” from foreign-owned companies.

Townsville Enterprise CEO Claudia Brumme-Smith

Townsville Enterprise CEO Claudia Brumme-Smith said regions kept the state “pumping and alive” but the money being returned was “minuscule”.

Ms Brumme-Smith said a lack of upgrades on the Flinders Highway, between Townsville and Cloncurry, saw some stretches slow to 20km/h.

She was also critical of the flood prone Bruce Highway and the number of times the major supply route was cut off following major weather events.

“We know the infrastructure that actually would create more wealth for Queensland is not getting the investment it needs because the royalties are staying in the south east corner, so regions aren’t getting what they deserve,” she said.

“Regions deserve to know where our money is going and how much is coming back

“We know that the return of investment from government into North Queensland and the North West will drive extraordinary wealth for Queensland and it’s not to be decisive between regions and the south east corner, it is about a fair share, and that’s all we’re asking for.”

Bravus executive director Samir Vora said there had to be more education and understanding about where the royalties and wealth was getting generated in Queensland.

Damien Clarke, managing partner of law firm McCullough Robertson who have a number of resource industry clients, said it would be great if the state government provided more examples of where royalty was money going, and how it improved the quality of life of Queenslanders.

“We’ve got examples of where the money generated through the industry has created a lot of opportunities, including investments in energy infrastructure across Queensland,” he said.

“There is a lot of good government spending, but then there’s a big whack of investment in bureaucracy, like the Keep Them in the Bank Bill, that doesn’t do anything much, and that’s really upsetting.

“The idea of having transparency, even if it is disproportionate between cities and regions, … let’s just see actually where (royalties) do go.”

Deputy Premier and Treasurer Cameron Dick said how royalties was spent, along with the other 90 per cent of the State’s revenue, was “clearly explained in the Queensland Budget”.

“The money from royalties belong to Queenslanders and is paid by mining companies who are making huge profits by selling our state’s resources,” he said.

“Queenslanders only have one chance to receive fair compensation for these resources because once they are out of the ground and sold, they no longer belong to the people of Queensland.”

Mr Dick said the state government invested in the infrastructure, frontline staff, and services that regional Queensland needed, regardless of how much was generated through royalties.

“This financial year the $8.6 billion in royalties make up less than 10 per cent of total government revenue, meanwhile $15.9 billion or 70 per cent of our infrastructure spend is outside of Greater Brisbane, directly supporting 50,000 jobs,” he said.

“From Townsville to Mount Isa, we’re spending $5 billion on the Copperstring power transmission project.

“Just outside Mackay we’re building the Pioneer-Burdekin Pumped Hydro project, which is estimated to cost at least $12 billion and will itself support thousands of local jobs, as well as hundreds of local businesses and tradesmen.

“Once you add in the $1.5 billion we’re spending on the Townsville Hospital and Health Service and $679 million on the Mackay Hospital and Health Service, it’s clear that the amount of money raised by royalties is nowhere near the amount spent in regional Queensland.”

Ms Hewson said while royalties benefited the whole state, the tax policy would not be sustainable long-term if it continued to discourage investment.

“Queensland’s resources sector is proud of the contribution it has made to our state that benefits everyday Queenslanders,” Ms Hewson said after last month’s State Budget.

“But without a fair and balanced royalty system that encourages new investment, our resources will remain in the ground, and no one will benefit, and the biggest damage will be to small businesses and jobs in regional Queensland.

“The contribution our industry is able to make to Queensland today is the result of decades of good management, hard work, quality resources combined with stable and consistent policy settings that provided confidence to invest in new projects.”