Coal tax hike squeezes an extra $6.5bn from Queensland miners in first two years

The Palaszczuk government’s decision to raise taxes on coal mining companies is expected to squeeze an extra $6.5bn from the industry in the first two years of the scheme.

Queensland Resources Council chief executive Ian Macfarlane. Picture: Zak Simmonds

The Palaszczuk government’s decision to raise taxes on coal mining companies is expected to squeeze an extra $6.5bn from the industry in the first two years of the controversial royalty scheme.

The mining industry’s peak body, Queensland Resources Council, will on Thursday release a report detailing its ­contribution to the state, which shows a record $116.8bn injection into the economy last financial year.

Economic analysis by Lawrence Consulting, commissioned by the QRC, reveals the state’s mining industry supported 532,918 jobs last year, 45,065 through direct employment and 484,078 indirectly.

QRC chief Ian Macfarlane said “conservative” Treasury estimates predict coal royalty revenue will be about $20bn in the first two years of the new scheme, which is about an $6.5bn more than what would have been paid under old regime.

“Suddenly ripping this amount of money out of a cyclic, commodity-based industry like the coal sector in just two years is a big mistake and has been poorly received by the market,” he said.

“Queensland’s current prosperity is the result of decades of past investment by mining and energy companies from all around the world, as well as by companies based right here.

“Unless that level of large-scale, long-term investment continues, Queensland’s economy is going to look very different in the future. We shouldn’t be giving companies a reason not to invest here.”

Following a decade-long freeze on coal royalty, Treasurer Cameron Dick introduced three new tiers of rates on soaring worldwide coal prices in June last year, after repeatedly promising no new or increased taxes during the 2020 state election campaign.

In its first year of operation, the scheme delivered the biggest state budget surplus on record and allowed the government to bankroll $550 energy ­rebates for every household, a new hospital in Moranbah and the CopperString electricity trans­mission line.

The QRC last year launched a $40m advertising campaign, which it plans to run until the election in ­October next year, arguing the royalty scheme has made companies uncompetitive on the global stage.

Queensland taxpayers have funded two campaigns, at a cost of $2.6m, to counter QRC attacks and sell the government’s decision to raise taxes on mining companies.

Liberal National Party leader David Crisafulli has refused to guarantee he will retain the scheme – with a top tier of 40 per cent for coal prices above $300 a tonne – for the full four-year term of government if he wins the election. Mr Crisafulli in September said he would not make changes to the regime for four years, because coal royalty revenue was already committed across the budget’s forward estimates, but would not rule out axing it after mid-2027.