Appea CEO Ian Macfarlane
PERTH (miningweekly.com) – The Queensland resources sector has lashed out at the 2.5% hike in the petroleum royalty rate, revealed in the state Budget on Tuesday, which is expected to net the state government an additional A$476-million over the next four years.
The Queensland Resources Council (QRC) on Tuesday said that the increase in gas and petroleum royalties from 10% to 12.5%, threatened jobs in regional Queensland, as well as investments and exports.
“Premier Annastacia Palaszczuk and Treasurer Jackie Trad have broken a promise and broken their word to regional Queenslanders,” QRC CEO Ian Macfarlane said.
With resources royalties this year forecast to hit unprecedented highs of A$5.45-billion, including A$4.34-billion from coal, Macfarlane said the government had betrayed the trust of the 315 000 Queenslanders who work in the resources sector, especially in regional Queensland.
“In Townsville two weeks ago the Premier said: ‘there will be no royalty increase in this year’s budget’. Today we discover that’s not the case.
“After weeks of refusing to rule out hiking coal royalty rates, the government has blindsided the resources sector with an increase in royalty taxes from 10% to 12.5% on petroleum including liquefied natural gas (LNG) extracted in western Queensland and exported from Gladstone.
“This will make Queensland gas less competitive and will risk jobs and future investment and the creation of new jobs. It will also make lower emission energy generated from gas more expensive and increase the cost of gas to manufacturers such as Incitec Pivot in Brisbane.”
Macfarlane said that exacerbating the issue was the fact that Queensland was the only state on the east coast that is developing its gas resources.
“This tax hike risks the gas supply for all Australians, not only Queenslanders, given Queensland gas suppliers have been doing all the heavy lifting for the gas market.
“Billions were poured in Queensland’s world-leading gas industry based on export models, while at the same time supplying the gas that domestic manufacturers need to sustain their industries and protect jobs. Today’s royalty tax increase casts a dark cloud over future growth in the Queensland gas industry.”
Royalty rates for mining companies will remain stagnant for a one-year period, but could face a potential increase thereafter.
Trad has been fielding allegations of extortion over the freeze in the mining royalty rate, after promising miners that royalty rates would remain frozen for the next three years, while at the same time urging miners to voluntarily contribute as much as A$70-million to a Resource Community Infrastructure Fund.
The fund would be targeted at improving economic and social infrastructure across Queensland’s resources communities.