Coal sector bodies lash out at QLD govt royalty broken promise, warn of drop in investor confidence

Queensland’s hike on coal royalties is an “unacceptable” tax grab that will harm local business confidence and make it less attractive to new big resource players, the industry sector warns.

Queensland’s hike on coal royalties is an “unacceptable” tax grab that will harm business confidence in the state and make it less attractive to new big resource players, the industry sector has warned.

Treasurer Cameron Dick on Tuesday announced a hike in royalty fees for the coal industry amid surging commodity prices, a move that will rake in $1.2bn over four years.

The budget papers argued the “exceptional surge in coal prices” last year and now meant the state’s current royalty structure did not “provide a fair return to Queenslanders” during boom periods.

But the measure meant Mr Dick had broken a promise of “no new taxes” on businesses he made at the previous election.

Industry peak bodies including the Queensland Resources Council (QRC), the Australian Mining Exploration Council (AMEC) and the Minerals Council of Australia (MCA) slammed the move as “unacceptable”,

“This tax grab is shortsighted and counter-productive over the long term and has the potential to scare off investors in all commodities,” MCA chief executive Tania Constable said.

“It will not only impact thousands of direct mining jobs but also thousands of small businesses and many communities that support mining.”

Minerals Council Chief Tania Constable in Canberra. Picture: Gary Ramage

AMEC chief executive Warren Pearce said Mr Dick’s broken promise of no new taxes should be of concern to other industries like oil and gas, and even hydrogen, saying it was “quite clear” the government was interested in bolstering the bottom line more than ensuring a “fair return”.

The QRC’S Ian MacFarlane said the move was a “kick in the guts” for the industry and was a “short-term political move with long-term consequences”.

“This is a seriously misguided economic policy that will make Queensland’s number one export industry and private sector employer less internationally competitive,” he said.

Three new tiers have been added to Queensland’s coal royalty structure – with companies to now pay 20 per cent on the dollar when prices exceed $175 per tonne, 30 per cent on the dollar when prices climb beyond $225 per tonne and 40 per cent when they exceed $300.

Mr Dick, pre-empting the backlash, said royalty rate changes did not apply to the existing tiers

“Each of these new tiers applies only on the margin, so at a coal price of $302 per tonne, the 40 per cent rate would only apply to the last $2,” he said.

The royalty rate hike was welcomed by the Australian Conservation Foundation and the Greens.

ACF climate and energy campaigner Jason Lyddieth said coal had done “ a lot of damage to the environment” and it was “good to see that Queenslanders are going to start getting some of this money back”.