The damage to the Queensland economy from the State Government's sudden decision last year to increase coal royalty tax rates to the highest in the world has been laid bare in a new report released today.
The Queensland Resources Council's (QRC) latest State of the Sector report for the December 2022 quarter shows there has been a dramatic drop in business confidence in the state's resources sector over the past 12 months.
QRC Chief Executive Ian Macfarlane said the report shows 60 per cent of resources CEOs are now less confident about the sector's future compared with 10 per cent last year, representing a five-fold increase in negativity.
He said the drop in confidence in the industry's future has substantially impacted expansion plans for the sector, with only 35 per cent of CEOs now planning to expand their Queensland operations compared with 55 per cent last year.
Worryingly, the proportion of CEOs now unlikely to expand their operations has increased threefold over the past 12 months, climbing from 10 per cent to 30 per cent.
Just as concerning is the number of CEOs feeling more confident about the sector's future growth prospects is now a quarter of what it was in January 2022, falling from 60 per cent to an alarming 15 per cent.
Mr Macfarlane said Queensland's future growth pipeline of projects - estimated by the Commonwealth Government's Office of the Chief Economist to be between $103 billion and $142 billion worth of projects at the announced or feasibility stage – has been placed at risk.
"The rapid decline in confidence in the resources sector's future prospects over the past 12 months is a direct result of the Queensland Government's decision to dramatically increase coal royalty tax rates," he said.
"Minerals, metals and refining projects are now at risk of being put on hold or cancelled as resources companies urgently review their investment plans for Queensland.
"A decision like this impacts the whole resources sector – from coal, gas and metals projects right through to critical minerals – because it signals the Queensland Government is prepared to make sudden changes to government policy, without industry consultation, to meet short-term political goals.
"Queensland has traditionally been a destination of choice for many large-scale, long-term resources investors because of its relatively stable and consistent regulatory environment, but that competitive advantage has now been lost," he said.
"Resources projects in Queensland are now over-taxed and uncompetitive compared with other jurisdictions, including within Australia, which has placed jobs throughout our supply chain and the long-term interests of all Queenslanders at risk."
The report released today also found the number one concern keeping Queensland CEOs awake at night is uncertain and/or poor regulation (up from number 5 six months ago), followed by the global macroeconomy at number two (dropping down one), with high input costs coming in at number three (down from two).
