The Queensland Resources Council has slammed the Queensland Government’s decision to reimpose royalty taxes on coal, saying it would hit regional communities and businesses hard, forcing companies to rethink their future investment and employment plans.
The new three tiers of taxes were announced in the State Budget, and follows a 10-year freeze for coal, the longest pause in royalty arrangements in modern Queensland history.
Treasurer Cameron Dick said with the freeze expiring on June 30, the existing rates do not account for the unprecedented windfall prices that coal producers are now receiving.
“Our existing coal royalty tiers were primarily designed for lower coal prices, with a top tier at $150 per tonne, with royalties charged at 15 per cent,” he said.
“However, with coal recently trading at over $500 per tonne, our current rate structure is clearly no longer fit for purpose.”
The new rates will be 20 per cent for prices above $175, 30 per cent for prices above $225, and a 40 per cent tier that would apply when prices exceed $300.
But QRC chief executive Ian Macfarlane said the the decision would have a flow-on effect on the cost of living through higher electricity prices, higher construction costs and higher-priced consumer goods “that will add to inflation and impact every Queenslander”.
“This is a seriously misguided economic policy that will make Queensland’s number one export industry and private sector employer less internationally competitive,” he said
Macfarlane said lifting taxes to fix a hole in the budget was a short-term, political move with long-term consequences for a major, wealth-creating sector of the Queensland economy.
“This tax grab has been developed behind closed doors and without consultation with industry. It’s a kick in the guts and not a fair deal for the resources sector, which has kept the Queensland economy afloat during the pandemic by supporting jobs and businesses throughout the state,” he said.
“Regional resources communities have every right to ask this Government why their jobs and the economic prosperity of their towns should be put on the line for the sake of a short-term budget fix.
“The Queensland resources sector already pays the highest royalty taxes in Australia, double that of NSW, and will now pay the highest rates in the world.
“Under the existing arrangements, as our commodity prices go up, so too do the royalties we pay into the state budget, which means every Queenslander benefits from our prosperity.
“That’s why this year, royalty taxes paid by the coal industry is an all-time record and four times last year’s payments.”
