Mining organizations have criticized the Queensland government’s decision to raise coal royalty rates, calling the measure “short-sighted” and “wrong”.
Key points:
- Queensland government announces three new levels for coal royalties in Tuesday’s budget
- Copyright has been frozen for a decade, limited to 15% for prices above $ 150 per tonne.
- The mining industry has criticized the move and warned that it could hurt future investment, but others have welcomed it.
Treasurer Cameron Dick announced on Tuesday what he called a new progressive gift scheme in the state budget.
But Australia Minerals Council chief executive Tania Constable said she believed the move could endanger jobs.
“This tax take is short-sighted and counterproductive in the long run and has the potential to scare investors in all commodities,” he said.
The new scheme would include three new levels added to the gift system, which is currently limited to 15% for prices above $ 150 per tonne.
Starting next month, new levels of 20 percent would apply for prices above $ 175 per tonne, 30 percent for prices above $ 225 per tonne, and 40 percent for prices above $ 300. per ton.
Existing royalty levels are:
- 7 percent for prices of up to $ 100 per ton included
- 12.5 percent for prices from $ 100 to $ 150 per ton
- 15 percent for prices above $ 150 per ton.
The new levels are:
- 20 percent for prices above $ 175 per ton
- 30 percent for prices above $ 225 per ton
- 40 percent for prices above $ 300 per ton
Dick said each new level applied only to the margin, meaning if the price of coal was $ 302 per tonne, the 40 percent rate would only apply to the last $ 2.
“With coal being recently quoted at over A $ 500 per tonne, our current tariff structure is no longer suitable for its purpose,” he said.
“We know that foreign shareholders in coal companies will not like these changes, but they can rest assured.
“We are not raising rates that apply to existing levels.”
He said the new scheme was expected to provide an additional $ 1.2 billion in royalties on future estimates.
“All that $ 1.2 billion, and more, will go to regional Queensland,” Dick said.
“Wrong” policy.
But Queensland Resources Council chief executive Ian Macfarlane said the policy was “wrong” and would make the state less competitive internationally.
“What the government is not telling people is that because of the process of equating the GST, 80 per cent of the additional rights raised will be redirected to Canberra over the next five years,” he said.
“Therefore, the net economic benefit to Queensland will be minimal, but the potential damage to our industry and Queensland’s economy could be significant.”
He said the resource sector contributed a record $ 84.3 billion to the state’s economy last year, including through spending, and supported more than 422,000 jobs.
Queensland Resource Council CEO Ian Macfarlane considers raising the copyright rate to be a “wrong” move. (Provided by: QRC)
New tax labeled ‘inconceivable’
Anglo American operates several mines in central Queensland, including the Moranbah North and Grosvenor mines.
The company’s Australian CEO Nick Barlow said the changes meant he would now contribute 60 per cent of his profits to governments through state and federal taxes.
“Queensland’s coal gift rates were already among the highest in the world,” he said.
“This new tax is inconceivable and will be a huge burden for our industry and the mining regions of Queensland.”
Anglo American operates several mines in central Queensland. (ABC Tropical North: Melissa Maddison)
He said the new levels would hurt business cases for any new investment.
“Significant capital investment is required to sustain mining operations, including the construction and preparation of mining areas, mining equipment and infrastructure,” Barlow said.
“In a very cyclical business, we need higher price periods to make these investments, which not only create jobs and support our regions, but also benefit the Queensland economy.
Capitalization of assets
Professor John Quiggin of the University of Queensland’s School of Economics said the government’s policy was a “good way to capitalize on current high coal prices, which are unlikely to be maintained”.
“Raising these rates will not lead anyone to close,” he said.
“If the price is $ 300 a tonne, paying $ 120 in royalties won’t leave you out of business.
“You will not see them [high] prices indefinitely.
“Now we have a chance to get the money out of these resources. It won’t come back.”
Queensland is home to a variety of thermal and metallurgical coal mines. (ABC News: Christopher Gillette)
Professor Quiggin said he believed that regardless of the new levels, there would be no significant new investment in coal.
“This is one of the reasons why prices have gone up so much, because no one is willing to invest much to access new coal resources,” he said.
“What we have is an asset, which is worth a little now but will have no value in the future.”
Buyers could look elsewhere
Kylie Porter of the Greater Whitsunday Alliance, the economic development agency for the Mackay, Isaac and Whitsunday regions, said the government’s move could affect coal sales.
Greater Whitsunday Alliance CEO Kylie Porter says coal buyers may be looking elsewhere. (ABC / Cathy Van Extel)
“We need to be realistic about the fact that coal buyers in our region can start looking at other markets because the price will be up there and very expensive,” he said.
He said Queensland coal was one of the “most efficient” and that this move could “force buyers to move away from our market and use lower quality coal”.
“These are conversations that we really need to have and find some balance in the argument around,” Ms. Porter said.
“What we really need to make sure is that our regions, during the current period of coal prices, receive support as we begin to look for new substitute sectors that can help support the transformation of our community for the future. “.
Communities want returns
Anne Baker is the mayor of the Isaac Regional Council, an area that covers much of the Bowen Basin and is home to many coal mines.
The mayor of Isaac Regional Council, Anne Baker, wants to reinvest copyright in her region. (ABC News: Jess Davis)
“What we do know, in the Isaac region, is that our region contributed 53% of Queensland’s coal royalties and we are the largest resource region in the state,” Cr Baker said.
“So what we want to see is a proper reinvestment of copyright in our region, funding that supports health, education, childcare, care for the elderly, and affordable housing. .
“That’s our role to defend and work on, to draw that attention to the conversation.”
The budget also included funding for projects such as a new hospital in Moranbah, which Cr Baker thanked.
“We are making a great contribution to the economy of this state, and it is fair and reasonable that there should be a fair return to the regions that offer this economic positive,” he said.
Central Highlands Development Corporation CEO Peter Dowling said he was still digesting what it meant for local industry, but hoped to see more investment.
He said the region “hit far above its weight” in terms of economic output.
“The challenge we face in inland regions like the Central Highlands is investing in our regions for all the essential living requirements we have,” Dowling said.
Posted 2 hours ago Tuesday, June 21, 2022 at 8:48 AM, last updated 2 hours, 2 hours ago, Tuesday, June 21, 2022 at 9:03 AM