Qld Budget 2022: Mining royalties hike naive, says LNP

The chorus of criticism of Queensland’s mining royalties hike has intensified, with the architect of Australia’s free-trade deal with Japan weighing in.

Queensland has a strong relationship with Japan, Treasurer Cameron Dick has insisted, after the Japanese ambassador warned the state’s controversial coal royalties hike had put future investment at risk.

But one of the main architects of Australia’s free-trade deal with Japan, former federal trade minister Andrew Robb, said the royalty increase sent “all the wrong messages” to one of the nation’s strongest allies.

Japanese ambassador to Australia Shingo Yamagami, in a speech to the University of Queensland on Wednesday, warned the state’s move had been a “huge shock” for Japanese companies and the lucrative business relationship with Tokyo was at “great risk”.

He said some companies were already questioning if the state would continue to be a “safe and predictable place” to invest that they once knew.

Mr Dick, in the aftermath of the unprecedented comments, said the relationship with Japan was strong, valuable and important and would remain that way for decades to come.

He then reiterated that resources belong to the people of Queensland.

Mr Robb said the royalty hike, seemingly done without consultation with the industry, could damage the relationship and would reverberate strongly across investment funds across the world.

“To do this to one of our strongest allies (Japan), and one of the biggest contributors of taxation in Queensland, sends all the wrong messages,” he said.

Federal Resources and Northern Australia Minister Madeleine King sidestepped questions about the impact of Queensland’s move on the relationship with Japan, and said there was a balance to be struck in ensuring a fair return on resources that were Australian’s “birthright”.

But she also signalled she would take a consultative approach when considering reforms that impacted the resources sector.

Townsville-based Opposition resources and northern Australia spokeswoman Senator Susan McDonald said she had already been approached by business players outside coal, including in hydrogen and critical minerals, concerned about what else could be in store from the state government.

“What Queensland has done by increasing the royalty rate with no consultation at a time when the cost of production has increased dramatically, demonstrates a real naivety in the way the world works and an arrogance about our single biggest export market,” she said.

The new royalty regime adds three tiers to the existing tiered structure, with companies to now pay 20c in the dollar when coal prices exceed $175 per tonne, 30c when prices climb beyond $225 per tonne and 40c when they exceed $300.

Originally published as Qld Budget 2022: Mining royalties hike naive, says LNP