Queensland miners to mount $40m anti-tax campaign

Queensland resources companies are preparing to launch a two-year, multimillion-dollar cam­paign against the state govern­ment’s coal royalty tax.

Queensland Resources Council chief executive Ian Macfarlane. Picture: NCA NewsWire / Dan Peled

Queensland resources companies are preparing to launch a two-year, multimillion-dollar cam­paign against the state govern­ment’s coal royalty tax amid warnings that it will cripple the sector, raise sovereign risk and damage Australia’s international reputation.

The Queensland Resources Council will on Wednesday unveil its campaign at its annual State of the Sector forum in Brisbane, with ads set to run across television, print and radio.

Industry sources have confirmed to The Weekend Australian that the campaign will cost about $40m, with QRC chief executive Ian MacFarlane saying the sector was prepared to do “whatever it takes” to force a wind-back.

Japan will make an extraordinary intervention to back the resource sector’s anti-mining tax campaign, with ambassador to Australia Shingo Yamagami set to give a virtual address to some 1000 attendees at the QRC lunch next week.

Queensland increased the top coal tax royalty rate from 15 per cent to 40 per cent in the June state budget, provoking a warning from Mr Yamagami that the future of a successful partnership between Japan and Queensland was at “great risk”.

Queensland’s tax rate is now the highest in the world, compared with Canada (15 per cent), Colombia (10 per cent) and South Africa (7 per cent).

Mr Yamagami has been highly critical of the tax hike, saying it risked “trust and goodwill” built up over years and warning the fallout could extend beyond the coal sector to vital new areas of co-operation, including efforts to shift towards cleaner energy sources and to reduce carbon emissions.

Alarm is brewing in the nat­ion’s resources industry after Anthony Albanese confirmed a new tax on gas and thermal coal was under consideration in a bid to quell soaring energy prices.

The Australian this week revealed resources companies were preparing to replicate and exceed the $22m anti-mining tax campaign that led to the demise of Kevin Rudd if the Albanese government imposed new taxes and multi-employer bargaining on miners.

Mr MacFarlane told The Weekend Australian the tax would be “disastrous” for producers and make them uncompetitive on the global stage.

He said the state government’s estimation it would raise $800m this year and $1.2bn over the forwards was “grossly underestimated”, with the sector expecting about $4.5bn to flow to the government’s coffers this year alone.

“The level of the royalty is completely out of whack with everything else,” Mr MacFarlane said. “We want to know what the government is going to do with the extra $4.5bn.

“Will it go back to the communities they have collected it from or is the (it) going to fritter it away on something else?”

A resource industry executive who spoke on the condition of anonymity said the coal tax hike has created sovereign risk, which would drive investment and jobs offshore.

“The royalty tax will hurt the current mining industry but it will kill investment for future green and renewable technology in Queensland because no one will have the confidence to invest here,” they said.

“While it will hurt regional communities now, the greatest damage the royalty tax will do is stopping the investments Queensland needs for the future.”

BHP, which is a member of the QRC, has already halted investment in Queensland coal as a result of the royalty tax hike.

BHP chief executive Mike Henry told investors at the company’s annual general meeting last week it was the only part of the business where growth had stopped.