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Queensland has ruled out offering a coal royalties holiday to woo large investments in new mines, refusing to budge on the tax setting under intense pressure from industry heavyweights.
The world’s biggest miner, BHP, along with sector lobbyists have fuelled an ongoing campaign for the LNP state government to ditch the tax settings introduced by Labor in 2022.
Mackay Mayor Greg Williamson recently claimed Premier David Crisafulli had privately floated a loophole that would lower taxes for new mines, according to a News Corp report.
The premier’s office strongly denied the royalties carve-out was discussed and Treasurer David Janetzki doubled down on the state’s position in a pre-budget interview with this masthead.
He said the government was not open to considering either a temporary royalty discount or a royalty holiday for companies investing large amounts of money in new Queensland coal mines.
“We’ve said no changes to coal royalties,” Janetzki said ahead of handing down his second budget on Tuesday.
Stuart Bocking, chief executive of industry lobby Coal Australia, described the state’s royalties regime as “economically negligent”.
He said the tax remained a deterrent for some overseas investors despite the recent spike in coal prices.
“Only last week Coal Australia was represented at a major coking coal conference in Singapore where international buyers continue to express their strong concerns about the impact Queensland’s royalties are having on investment in the sector,” Bocking said in a statement to this masthead.
“It’s disappointing the LNP continues to embrace Labor’s policies by ruling out royalty relief in this budget.”
Queensland Resources Council chief executive Janette Hewson said attracting investment into both new and existing mining projects was crucial for economic growth in regional Queensland.
“Any reforms to the current coal royalty system should provide relief for all coal producers, including existing mining operations or new mines to encourage future investment,” she said.
Between 2022-23 and 2023-24, Queensland pocketed $31 billion from coal royalties, but the revenue has been falling since following a decline in coal prices.
However, the price has picked up substantially in the last few months due to conflict in Iran combined with Chinese mining disasters.
Coking coal has been running at an average of about $US210 per tonne compared with last year’s budget assumption of $US192. This masthead was told each 1 per cent variation results in a revenue change of about $100 million – meaning the higher price will deliver an additional boost of nearly $1 billion this year alone.
Janetzki refused to confirm the revenue figure but said there were various factors relating to the coal sector that made royalties volatile.
“Coal royalties will always be subject to commodity prices, Aussie dollar fluctuations, weather – so there’s a lot of factors that go into coal royalty forecasts,” the Treasurer told this masthead.
“Let’s just say we’re not getting another $15 billion a year like [former Labor treasurer] Cameron Dick got.”
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James Hall is the News Director at the Brisbane Times. He is the former Queensland correspondent at The Australian Financial Review and has reported for a range of mastheads across the country, specialising on political and finance reporting.Connect via X or email.From our partners
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