QRC warns on Bowen Basin coal royalty tax blow

New royalty rates are threatening the future of Bowen Basin communities, as the taxes look set to suck an extra $5 billion from the coal industry this year, the Queensland Resources Council warns. QRC chief executive Ian Macfarlane said the scale of the sudden state royalty tax hike was already impacting decisions about resources investment and jobs across the state. “Alarm bells should be ringing for the State Government and for every Queenslander. No industry can withstand such a heavy-handed and sudden tax impost, not even an industry as resilient and significant to the Queensland economy as the coal sector, which represents about 60 per cent of our exports,” he said. Bowen Coking Coal will officially reopen its Burton mine complex near Moranbah today. He is in Moranbah today, where Bowen Coking Coal will officially reopen its Burton mine complex - an investment decision made before the State Government’s royalty increase. Related: Japan warns over wider risk in coal royalty hike Bowen Coking Coal executive chairman Nick Jorss has previously spoken out on the royalty ramp-up. He told iQ last year that while the mining industry was happy to pay its fair share and contribute more towards closing the budget gap, it must not be lumbered with the world's highest royalty regime by a huge margin permanently. "That's just going to lead to investment uncertainty and an investment crash, which does impact jobs," he said at the time. Last year, the Queensland Government announced it would add three higher tiers to the state’s royalty tax system, costing coal producers an estimated extra $800 million in 2022/23. But the latest price forecast from the Office of the Chief Economist suggests the amount will be closer to an extra $5 billion, bringing the total amount of coal royalties paid by coal companies this financial year to an unprecedented $13 billion. Related: Glencore withdraws from Valeria Mr Macfarlane said taking this amount of money out of the sector in a one-year period was a huge disincentive for companies to continue to invest in Queensland. “The frustrating reality is that before the new tax tiers were introduced, coal companies would have still contributed a record $8.3 billion in royalties to the state budget this financial year because coal prices have been so strong,” Mr Macfarlane said. “When prices are high, the amount of royalties paid by companies increases. That’s how the previous system worked, and it was working well for Queensland." Royalties central to key regional projects - Dick The State Government recently awarded Hutchinson Builders the contract to deliver the new $48.5 million Moranbah hospital - a project Queensland Treasurer Cameron Dick cites among the rewards communities are reaping from Queensland coal royalties system. Treasurer Cameron Dick. He told Parliament there would be no new Moranbah hospital if the LNP had its way and cut the new royalty rates to satisfy the mining lobby. “There would be no major upgrades to hospitals in Mackay, Townsville and Cairns and there would be no CopperString 2032. All of those projects are being funded in whole or in part by Queensland’s new progressive coal royalties,” he said. Related: Union backs government after coal royalty criticism But the QRC argues it will be regional communities throughout areas like the Bowen Basin that will be hardest hit under the new regime. It points to figures showing that 90 per cent of employment in the Isaac Regional Council area relies on the resource sector either directly or indirectly, while the resources sector supports 67 per cent of all employment in the Central Highlands Regional Council area. Images below: Infographics provided by the QRC on resource sector contributions to local government areas last financial year.

QRC warns on Bowen Basin coal royalty tax blow

Industry Queensland

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