The Queensland government’s enormous royalty increase for the resources sector which comes into effect today is a short-sighted grab that will stifle future investment.
It is an extraordinary decision at a time when mining royalties for Queensland have nearly tripled, from $3.3 billion forecasted in last year’s budget to $9 billion.
Mining is the reason the Queensland budget recorded a surplus in 2021-22 worth $1.9 billion, a significant turn-around from the forecast in last year’s budget which expected a $3.5 billion deficit.
Data from the Australian Bureau of Statistics shows the coal industry paid $58 billion in wages over the last 10 years.
Coupled with state royalty payments worth $42 billion, the industry has paid over $100 billion to the people of Australia in a decade – nearly 20 per cent more than its operating profits before tax in the same period
This unprecedented 40 per cent royalty on revenue together with Australia’s 30 per cent tax on profit makes Queensland the highest taxing mining jurisdiction in the world.
Quite simply, it’s a breathtaking cash grab that may have serious future consequences for the industry, those employed in it and the businesses and communities that support it.
Mining creates high paying jobs for thousands of Australians, fosters regional supply chains with over 15,000 local business and supports more than 1,400 community organisations across Queensland.
The industry pays royalties even when it isn’t profitable and royalties increase when industry conditions improve – as intended.
The new royalty rate will have a major impact on a number of planned new mines in Queensland. The state cannot afford to lose this future investment which will reduce job and supply chain opportunities across regional Queensland.
At a time when Queensland aims to attract investment via its recently released Queensland Resources Industry Development Plan it has wrecked investor confidence with its royalty increase that came with no consultation with the mining industry.
A reputation as a stable investment destination has been damaged in one announcement and threatens future investment in commodities such as copper, nickel and rare earth elements mines in Queensland.
Stable and internationally competitive royalty regimes are critical to ensuring mining investment continues to grow and deliver further benefits for all Australians.