Today's confirmation by Australia's biggest mining company that significant new investment in Queensland is on hold because of the State Government's decision to lift coal royalty tax rates to the highest in the world is a massive blow to Queensland, the Queensland Resources Council (QRC) said today.
In a quarterly operations review released to the ASX, BHP said:
"The Queensland Government's decision to raise coal royalties to the highest maximum rate in the world makes Queensland uncompetitive and puts investment and jobs at risk. We see strong long-term demand from global steelmakers for Queensland's high quality metallurgical coal, however in the absence of government policy that is both competitive and predictable, we are unable to make significant new investments in Queensland. This increase to royalties will impact the local businesses, suppliers and communities in Central Queensland where we operate."
QRC Chief Executive Ian Macfarlane today called on the Queensland Government to urgently review its decision to suddenly increase coal royalty rates mid-last year, which overnight made the state's coal producers less globally competitive and less attractive to investors.
"It's a classic case of a government killing the golden goose in exchange for a short-term tax hit," Mr Macfarlane said.
"You can't over-tax an industry, let alone Queensland's most important economic driver, and expect business to continue as usual."
"We know other mining companies are also reviewing their investment exposure in Queensland."
Mr Macfarlane said resources companies pull their weight economically and socially in Queensland, and have done for decades.
"Our mining and energy sector is the number one contributor to the state economy, number one regional employer and number one export industry," he said.
"We support the jobs of 450,000-plus Queenslanders and 14,000-plus businesses, who all pay taxes to help fund doctors, nurses, teachers and other government services."
"Last financial year, our industry contributed a record $94.6 billion to the state economy, which included a record $9 billion in royalties collected under the previous royalty tax regime."
"Unfortunately, this could all be about to change. Queensland's coal royalty taxes are now completely out of step with the rest of the world, and even within Australia."
"Some of the world's biggest mining companies, and this includes BHP, Glencore and Peabody, have now backed off or are rethinking their investment in new projects, as they reassess the stability of our local investment climate and the State Government's attitude towards the resources sector."
Mr Macfarlane said it was disappointing to hear Treasurer Cameron Dick continue to say in the media 'coal royalties are worth fighting for'.
"Queensland's resources sector is made up of Queenslanders, working and earning a living to support their families, so this is an odd statement for a treasurer to make," he said.
"Why fight the resources sector at all?"
"We need the State Government to work with us, to keep Queensland strong."
"Maybe the Treasurer should try fighting for the resources sector and its workers, instead of against it?"
