Treasurer meets with mining bosses on new infrastructure levy

Mining bosses have been asked to give the State Government $70 million towards a new infrastructure fund, or potentially face royalties increases.

TREASURER Jackie Trad has told mining bosses they need to give the government $70 million to fund infrastructure or potentially face royalty increases.

But Ms Trad has denied she’s putting a gun to the head of miners to force them to comply, instead saying she’s offered coal companies a three-year royalties freeze in exchange for a $70 million contribution to an infrastructure fund.

The pitch came during an urgent meeting with resources bosses to discuss State Budget plans for the new levy.

Ms Trad said the Government would contribute $30 million to the scheme and wanted all coal companies to tip in.

She denied she was forcing them to comply by holding the threat of royalty increases over them.

Ms Trad said there would be no royalties increase in the upcoming Budget for one year, regardless of whether companies agreed.

But if they did turn down the offer, the issue of royalty increases would be revisited next year.

“There will be no coal royalty increases in this year’s Budget, but if there is an agreement from the mining companies around this community infrastructure fund then we will make an agreement to freeze royalties for three years,” she said.

Ms Trad said the meeting was “very positive” and she hoped for an answer tomorrow.

She said if miners worked with the Government to deliver infrastructure to regional mining communities, including better roads, flood mitigation and community centres, then there would be stability for three years.

BHP, which arranged Premier Annastacia Palaszczuk’s Hay Point press conference on Adani, has been negotiating the proposal behind the scenes with the Government.

Resources companies claim the levy may impact the investment decisions on future mines.

According to some resources players, the levy has been specifically tailored to target thermal coal.

Miners pay a 7 per cent fee on all types of coal traded under $100 a tonne, rising to 15 per cent when the price rises to more than $150 a tonne.

Thermal coal has been trading at under $100 a tonne.

Opposition Leader Deb Frecklington seized on the news, claiming a new “tax” would destroy jobs across Queensland.

“This is Annastacia Palaszczuk’s way to kill off new mines like Adani,” she said.

“Let’s remember this will be their (Labor) sixth new tax.

“When Labor run out of money they come after yours.”

Queensland Resources Council chief executive Ian Macfarlane said he would consult with about 150 coal, gas and minerals companies currently operating in the state over the next 24 hours before the sector gave Ms Trad its answer.

“It’s the Treasurer’s offer, we’re prepared to consider it,” he said.

“We’ll have that discussion with the Treasurer once my member companies have signed off.”

But he flagged a royalty raise would be much more costly for the sector.

“She (Ms Trad) could raise royalties from anywhere from a quarter of a per cent to two per cent,” he said.

“If she raised them two per cent, it would be a billion dollars (per year), that’s on top of the $5.3 billion in royalty taxes that the industry is paying currently and that is one billion dollars more than the Treasury said that the Government would collect 12 months ago.”

Mr Macfarlane said Ms Trad’s royalties freeze offer didn’t match that of the LNP, who have promised to maintain current rates until 2022.

“There’s a better offer on the table from the alternate government of Queensland,” he said.

“We’d like to have further discussions with the Queensland Government.”

The move to introduce the levy comes as the State Budget has been hit by freefalling revenue from stamp duty, funding for a string of urgent commitments and the demise of funding promised by federal Labor if elected.

And it has come under increasing pressure on the approval of the Adani mega coalmine since the federal election result.

Ms Palaszczuk last week backflipped on her earlier delays and established a timeline for its approval.