PERTH (miningweekly.com) – The Queensland Resources Council (QRC) has called on the Queensland government to delay the 2.5% increase in gas royalties until January 2020.
During the state Budget earlier this week, the government revealed a surprise hike in the petroleum royalty rate, taking it from 10% to 12.5% with the expectation of an additional A$476-million in revenues over the next four years.
The QRC on Friday called for a delay in this increase to allow industry and government to work through ‘confusion’ in the draft legislation, QRC CEO Ian Macfarlane said.
“As it currently stands, the 2.5% increase in gas royalties on domestic and export gas will damage industry viability and increase costs to the electricity and domestic processing and manufacturing sectors,” Macfarlane said.
“Increasing the cost of gas to Queensland businesses puts their viability and jobs at risk. Of particular concern is the retrospective introduction of the royalty increase to January 1, 2019, which will be passed through as an additional charge to gas consumer companies which have already produced and sold their electricity and goods.”
Macfarlane warned that the shock tax increase announced in this week’s Budget would undo all the benefits Queensland has secured by being the only East Coast state to develop its own gas.
“We’re calling on the Premier and the Treasurer to hold off on any royalty increase until January 1, 2020, instead of rushing it through the Parliament and adding to the existing confusion on domestic gas royalty impacts.”
Macfarlane said that currently, the legislation for the gas royalty increase risked pricing Australian liquefied natural gas exports out of the international market and made domestic gas more expensive for industry users in Australia.
“At the very least there should be an exemption for gas sold on the domestic market. We’re calling on the Treasurer to make that commitment as soon as possible.
“Queensland is the only East Coast state producing new gas resources to supply the domestic market. Given production in the Bass Strait is declining, that means Queensland gas will be more important than ever.”