By Mark Scott & Jane Goldsmith

March 2015

New QLD Premier Annastacia Palaszczuk pledged not to increase royalties on the state's coal, minerals, petroleum and gas production.


AN “iron clad” guarantee from Queensland’s newly elected government not to touch mining royalty rates has prompted calls in WA for Premier Colin Barnett to follow suit.

The Annastacia Palaszczuk-led Labor Party picked up 33 seats in the January election to form minority government after pledging to leave royalties on coal, minerals, petroleum and gas unchanged.

The Chamber of Minerals and Energy of WA (CME) applauded a commitment by the two major Queensland parties to not increase royalties and has pushed for similar action in WA, where the state government is undertaking a review of its mineral royalty system.

“The commitments on royalties made by the Liberal National Party and Labor Party will deliver greater certainty for the Queensland resources sector,” CME chief executive Reg Howard-Smith said.

“While the royalty systems of Queensland and Western Australia may vary in rates, thresholds, exemptions and methodology, they both deliver significant revenue to the respective governments.

“All sides of politics need to follow the lead of Queensland leaders who have committed to no increases in royalties.”

In an interview on ABC Radio in January, WA Premier Colin Barnett flagged potential royalty increases under the review of mineral royalties, expected to be completed later this year.

“If there is change, it won’t be a shock; it won’t be large changes overnight… and if changes are necessary, they’ll be phased in,” Mr Barnett said.

Gold Royalties Response Group spokesman and Doray Minerals managing director Allan Kelly said phasing in a royalty increase across a number of years would be “death by a thousand cuts” for already-struggling gold miners.

“More than 4000 direct jobs in gold were lost last year as a result of miners being forced to downsize and the reality is that any additional costs will result in more job losses and seriously damage our industry,” he said.

Mr Kelly said the short term uptick in the Australian dollar gold price had not changed market sentiment.

“The price of the gold is subject to constant fluctuation and the very last thing we need is this extra layer of uncertainty surrounding the royalty rate,” he said.

“We want the Premier to put an end to this uncertainty and rule out any increase to the royalty rate.”

While WA mining bodies welcomed the new Queensland Government’s royalties policy, the Queensland Resources Council was vocal in its opposition to some of Queensland Labor’s mining policies prior to the election.

Labor pledged to end 100 per cent FIFO practices for major resources projects near regional communities and to review existing 100 per cent FIFO operations within 100 days of coming into office.

New Deputy Premier Jackie Trad later confirmed the policy would only apply to new mines and would not be retrospective.

Mr Roche said changing the rules under which companies have committed billions of investment dollars would be a very bad move by any government serious about attracting new investment and jobs.

He also warned Labor against overturning approvals for the controversial New Acland coal mine expansion.