QLD’s $116.8b benefit as QRC warns against coal royalty tax

Queensland’s resources sector has delivered a record $116.8b in economic benefits in FY23 and supported over half a million jobs in the State, according to the Queensland Resources Council’s (QRC) annual Economic Contribution Report released today.

This is $22.2b more than FY22, representing one in four dollars spent in Queensland, with QRC chief executive Ian Macfarlane saying that this shows what is at risk from the State Government’s introduction of the world’s highest coal royalty taxes on the sector.

“Queensland’s current prosperity is the result of decades of past investment by mining and energy companies from all around the world as well as by companies based right here,” he said.

“Unless that level of large-scale, long-term investment continues, Queensland’s economy is going to look very different in the future.

“We shouldn’t be giving companies a reason not to invest here.

“To put it this perspective, coal companies accounted for 72%, or $83.7b, of our sector’s total contribution to Queensland’s Gross Regional Product (GRP) in the past financial year and they continue to be our industry’s largest employer of Queenslanders.”

Mr Macfarlane says the 2022-23 Economic Contribution report shows an increase in the resources sector’s contribution to Queensland across every key indicator.

“The total number of direct and indirect jobs supported by the resources sector jumped from 450,000 to more than 532,000 over this 12-month period, accounting for one in every six Queensland jobs,” he said.

“Mining and energy companies spent a total of $33b buying goods and services from nearly 16,000 Queensland businesses and supporting over 1,400 local charities and sports clubs.

“The direct spend by the metals mining industry on local businesses and charities rose by 41% and the number of jobs supported by gas producers increased by 18%.”

Mr Macfarlane says a strong resources sector is crucial to Queensland’s continuing prosperity and to funding government services and infrastructure such as roads, police, hospitals and schools.

BHP recently announced it was not going to invest in any new growth projects in Queensland while the current royalty regime was in place.

“Queensland’s excessive tax on coal producers is out of step with the rest of the world and has given companies a reason not to invest in new projects here,” Mr Macfarlane said.

“Coal royalty tax revenue exceeded $15b last financial year, and the Queensland Government estimates conservatively indicate it will be at least $5b this year, but it is likely to be much higher.

“Payments by resources sector companies to the Queensland Government more than doubled last financial year.

“Royalties alone jumped from $8.9b to $18.1b and that’s before you add land and payroll taxes, transfer duties and other regulatory costs imposed by the State Government.

Mr Macfarlane adds that, under the former tax regime, coal producers would have paid about $14b in royalties over this period.

“So it’s about an extra $6.5b impost on the sector in just two years,” he said.

“If the government wants the resources sector to continue to support economic growth and jobs, it needs policies that encourage new investment and stimulate a pipeline of new projects in the years and decades to come.”