Treasurer Cameron Dick flags raising coal royalties in secret talks with resources industry

Treasurer Cameron Dick hasn’t ruled out increasing coal royalties in the state budget, saying he is working with industry around what a rise could look like.

Treasurer Cameron Dick hasn’t ruled out increasing coal royalties at the upcoming state budget, saying he is currently working with industry around what a rise could look like.

Mr Dick said he had a productive meeting with stakeholders on Wednesday morning as he insisted the government had honoured a 10-year royalty freeze.

“But obviously that resource belongs to the people of Queensland and now we’re looking at what that might look like in the future,” he said.

Asked how much it would rise by, the Treasurer said the government was “working through that detail at the moment.”

Mr Dick, who said he was a strong supporter of the industry, also insisted a potential rise in royalties wasn’t a broken election promise after the Palaszczuk government pledged to have no new or increased taxes in 2020.

“We’ve made it very clear in the election and we kept to our promise, there will be no new and increased taxes on working families in this state,” he said.

“There will not be any increased taxes on them and that’s what we will deliver on.”

Premier Annastacia Palaszczuk and Treasurer Cameron Dick. Picture: Tara Croser.

Asked to respond to claims from the resources industry that Queensland risked being uncompetitive should royalties rise, the Treasurer said the industry also said that 10 years ago when royalties changed.

“We’ve seen record investment in the coal industry,” he said.

Mr Dick’s comments come after The Courier-Mail exclusively reported the government was casting around for ways to fund its “record, record, record” investment in health to stave off the state’s hospital crisis in the upcoming June budget.

The paper revealed the Queensland Resources Council has told the Treasurer that its members “strenuously oppose” the royalty increase he’s actively considering ahead of the June 21 Budget as a three-year freeze expires.

Queensland Resources Council chief executive Ian Macfarlane. Picture: NCA NewsWire / Dan Peled

In a letter to Mr Dick last week, QRC chief executive Ian Macfarlane wrote that “additional tax burdens” risked “long-term losses for short-term gains”.

“Thank you for the opportunity to meet with you on Thursday 26 May 2022 to discuss resources industry issues, where you raised the likelihood of extra coal royalty taxes being imposed in the June 2022-23 Budget,” he wrote.

“The Queensland coal industry already has substantially higher royalties than any other jurisdiction in Australia.

“Any increase is therefore unwarranted and would risk Queensland becoming uncompetitive for future major thermal and metallurgical coal investment.”

Asked whether there would be an increase in coal royalty taxes, Mr Dick’s spokesman said the government had entered into an agreement with the resources industry to freeze royalties for a three-year period which it had “honoured in full”.

“That agreement expires on 30 June,” he said.

“With prices for coal at record highs, the government is in discussion with industry about what arrangements will apply after 30 June.”

Treasurer and Minister for Trade and Investment Cameron Dick. Picture: Matthew Poon

Former treasurer Jackie Trad offered coal companies a three-year royalties freeze in 2019 in exchange for a $70m contribution to a community infrastructure fund.

It comes as Premier Annastacia Palaszczuk on Tuesday insisted there would be a “record, record, record” health budget this year as the system continues to face unprecedented demand.

The government has not suggested how it might pay for the unprecedented health funding it will need to find to meet its promise.

According to December’s Mid-Year Budget update, resources royalties were expected to increase by $2.9b this financial year – pushing the overall royalties figure to $6.2b.

But in his letter, Mr Macfarlane wrote this could end up being even higher “under the existing royalty framework”.

“Further, given the lack of consultation about mooted changes to the coal royalty structure, the government is not in a position to appreciate the serious, unintended consequences due to the design of the tax measure,” he wrote.

Mr Macfarlane also wrote that the “existing progressive royalty structure” was “already working to return significant benefits to Queenslanders and therefore the resources sector opposes any arbitrary increases to coal royalty taxes.”

“The existing royalty structure is the framework against which resources companies have

weighed up their investments in the state and decided to proceed with job-creating and royalty returning projects,” he wrote.

“QRC points out that this is not only the case for metallurgical and thermal coal projects, but for the full range of resources projects which rely on stable policy settings.”

The state Budget will take place on June 21.