Opinion: Qld coal investment slumps as royalties threaten regional way of life

The impact of what we are seeing now will be felt years down the track, and not just in jobs, writes Ken O’Dowd.

Queensland’s coal sector is on the ropes. (File picture)

Investment in Queensland’s coal mining sector is slowing to a trickle, choked off by us having the world’s highest coal royalties rate, and it is regional families and businesses who will feel the impact now and in years to come.

According to the Queensland Resources Council, already almost $3.5bn in spending has disappeared from regional economies – including a huge $2bn from the Mackay region and more than $1bn from the Fitzroy region.

Spending and investment in our coal sector fell more than 10 per cent in the first quarter of this year compared to last year, and was down another 6 per cent in the second quarter.

That adds up to a lot of pain for every business that counts on mining for its revenue, whether they are big or small.

Our out-of-whack royalties regime is putting unnecessary pressure on the sector and we don’t need a crystal ball to predict there will be worse to come.

Queensland miners compete on the world stage and like every business, they must make smart decisions now about spending and investment in years to come – and right now, the state royalties regime is anything but smart.

Any good business person will tell you that if you can’t make a good return on investments today, there’s no incentive to invest in new or bigger projects in the future – it’s as simple as that.

The impact of what we are seeing now will be felt years down the track, and not just in jobs, with every dollar invested in mining delivering for families, businesses, sporting groups and services throughout the state.

In regional areas when local dollars dry up so does our way of life, with businesses, community groups and sporting clubs already seeing fewer customers, a dropoff in sponsorship and the departure of members and volunteers.

I really can understand the budgetary challenges the state government is facing, including paying for the Olympics, but that doesn’t mean our regional communities must cop the brunt of paying the bill.

A good first step to fixing this mess is to listen to the sector and have an open discussion about reforming the unbalanced and shortsighted royalties regime imposed by the previous Labor government.

It is the only way to staunch the flow of jobs, investment, talent and skills from our regions that is already happening and will eventually and inevitably impact the entire state.

Ken O’Dowd is former LNP member for the Gladstone-based federal seat of Flynn

Originally published as Opinion: Qld coal investment slumps as royalties threaten regional way of life