Qld coal royalties: Delayed reaction to booming royalties feared by Queensland Resources Council

Queensland will face a “hell of a problem” in a few years due to controversial coal royalty hikes, a powerful peak mining body has warned, despite cash gleaned from them expected to deliver a healthy boost to State coffers and help pay for cost-of-living relief.

Queensland will face a “hell of a problem” in a few years due to controversial coal royalty hikes, a powerful peak body has warned, as it used the eve of the budget to ramp up a campaign against the state government.

It comes as Treasurer Cameron Dick is set to hand down his toughest budget yet on Tuesday, with expectation cash gleaned from the coal super profits tax to deliver Queensland a healthy boost to its coffers and help pay for cost-of-living relief.

Queensland Resources Council chief executive Ian Macfarlane warned the impact of the nearly year old measure would be felt in three to five years as mining companies rethink investments in the state.

The mining peak body has been unsuccessfully lobbying the state government to reverse the decision, and has announced it has backed in another ad blitz to show the “negative consequences of the royalty tax for new investment”.

Cameron Dick in his office, ahead of the upcoming budget. Photo Steve Pohlner

“When the investment rules change so drastically and so suddenly as they did when the world’s highest coal royalty was introduced … that’s a wake-up call for investors in all resources projects who have reason to rethink whether Queensland is the best place to invest,” Mr Macfarlane said.

“Without new resources projects, there are no new jobs, which will impact every Queenslander in one way or another.

The government added three tiers to the existing structure, with companies now paying 20 per cent on the dollar when coal prices exceed $175 per tonne, 30 per cent on the dollar when they exceed $225 per tonne and 40 per cent when they exceed $300.

According to Queensland Resources Council’s latest estimates $13.6bn would be paid out in coal royalties in the 2022/23 financial year, about $8bn more than forecast.

Mr Dick, in a pre-budget interview, defended the “tough decisions” the government had made around revenue, signalling the takings from coal royalties was “one of the mechanisms that will help us provide cost of living relief”.

The QRC’S campaign has been running across television, radio, online platforms, newspaper and billboards, with Mr Mcfarlane vowing to keep it going until the day of the election if needed.