‘Beyond comprehension’: Japan’s fiery rebuke to QLD’s coal tax

Queensland’s coal royalty hike “sent shockwaves through Tokyo”, damaged trust with businesses and could impact investments in other sectors, Japan’s ambassador says.

The controversial coal royalty hike by the Palaszczuk Government “sent shockwaves through Tokyo”, damaged trust with Japanese businesses and could impact investments in other sectors like hydrogen, the nation’s ambassador said in a blunt rebuke to the Palaszczuk Government.

While Shingo Yamagami welcomed Treasurer Cameron Dick recently meeting with Japanese mining companies in Australia, he said it was only a first step and there was a long way to go.

He said it was “beyond the comprehension” of Japanese companies operating in the state that the top royalty rate was increased from 15 per cent to 40 per cent without prior consultation.

Japan’s ambassador to Australia Shingo Yamagami warned of “implications”.

It suggests Premier Annastacia Palaszczuk’s and Treasurer Cameron Dick’s recent meetings with the ambassador have failed to ease anger with the state’s largest trading partner in the wake of the decision.

Speaking at the Minerals Week event in Canberra on Tuesday afternoon, Japan’s ambassador to Australia Mr Yamagami doubled down on a recent speech where he said the royalty hike caused companies to question if the state was a safe and reliable place to invest.

It is rare for a diplomat to make blunt comments on a government’s policies in this way but

Queensland Treasurer Cameron Dick. Picture: NCA NewsWire / Dan Peled

Mr Yamagami said the royalties decision could have flow-on impacts to other industries.

“Japanese companies don’t see Australia as a house, but as a home. This is why decisions like the Queensland Government’s coal royalty hike carry so much potential risk,” he said.

“The royalty hike has affected the trust that Australia has with Japanese investors.

“This can have implications beyond Queensland, beyond the coal industry.”

He highlighted joint ventures in hydrogen as one of the potential investments at risk.

“The Queensland Government’s announcement sent shockwaves through Tokyo, causing the drop in stock prices of one of the major Japanese trading companies,” Mr Yamagami said.

The ambassador referred to his meeting with Ms Palaszczuk, who flew to Canberra in July, and said Mr Dick’s meeting with Japanese businesses last month came as a direct result.

“While this is a step in the right direction a lot remains to be done. Japan will continue to follow this issue closely,” Mr Yamagami said.

Mr Dick has previously stressed that the state’s relationship with Japan with “strong, valuable and important”, following the ambassador’s previous criticism.

He has said that the resources belong to the people of Queensland and they deserved a fair deal for those resources.

Meanwhile mining giant BHP, which has also been highly critical of the royalty increase, released its economic contribution report on Tuesday.

It revealed the royalties it paid to the Queensland Government had increased fourfold to $1.9 billion in the 2021-22 financial year, up from $514 million the previous year.

The increase came off the back of record high coal prices but before the state’s royalty hike which only began from July 1 this financial year.

Queensland Resources Council boss Ian Macfarlane said the issues caused by the royalty increase had only increased and the Queensland Government needed to take action to fix it.

“It’s clear that the trust and relationship between Japan and Queensland has been severely impacted,” he said.

“The Queensland Government has a relationship to repair there, starting with proper consultation and respect.

“If you look at rare earths and hydrogen, Queensland will need foreign investment and those companies are rethinking their investment in Queensland based on how they’ve been treated in this instance and the changing of the goal posts.”

Originally published as ‘Beyond comprehension’: Japan’s fiery rebuke to QLD’s coal tax