Queensland budget: mines hit by China stoush may shut

Canberra’s diplomatic tension with Beijing has prompted a warning from Annastacia Palaszczuk that it could lead to coal mines being shut.

Queensland Premier Annastacia Palaszczuk in Brisbane on Tuesday. Picture: Getty Images

Canberra’s diplomatic tension with Beijing could impact on the Queensland budget’s already reduced­ revenue figure and prompted a warning from Anna­stacia Palaszczuk that it could lead to coalmines being shut.

The budget handed down by Treasurer Cameron Dick on Tuesday was based on an assump­tion that Australia’s trade arrangements with China were expected to normalise in 2021-22.

It pre-empted the latest in a series of incidents that have escala­ted tension between the two nations, including increasing tariffs on Australian wine to up to 200 per cent on Friday and a social media post on Monday from a Chinese official showing a faked photo of an Australian soldier­ killing an Afghan child.

The Queensland Premier said the escalating trade tension threatened the state’s forecast rebound in employment and economic growth.

Ms Palaszczuk said she would raise the issue at national cabinet next week, and urged the federal government to resume trade talks with China as soon as possible, to preserve Queensland’s “strong” relationship with its trading partner.

Some of the coal ships sitting off Chinese ports in limbo were carrying Queensland coal, she confirmed.

“We would encourage the federal government to resume trade relationship talks, because what the mining companies are saying to me is that the last thing they want to see is mines closed in Queensland that could have an impact on Queensland jobs. We have been advised that companies are fearful of what could happen in the future if those trade issues are not sorted out.”

COVID-19 has slashed the state’s revenue, due to industry downturns and the impact of relief­ measures. The budget says since the 2019-20 mid-year update delivered in December last year, revenue had been revised down by $12.3bn over four years.

Forecast tax revenue has plunged $4.5bn, GST is down $3.8bn, and royalties — particularly coal — are down $4bn compared­ with the December fiscal update last year.

Queensland offered payroll tax refunds and deferrals to some businesses, land tax rebates, and a deferral of gaming machine taxes as a result of the pandemic.

The state’s overseas exports of goods and services are expected to fall by 11 per cent in 2020-21, before rebounding by 9.75 per cent in 2021-22. Demand for Queensland coal, liquefied nat­ural gas, and international education has dived.

“Reflecting the reduced demand in the first quarter, the continued impacts of COVID-19 and the uncertainty surrounding Australian access to the Chinese market, Queensland’s coal exports­ are forecast to fall 8 per cent in 2020-21,” the papers read.