A report from the Queensland Resources Council (QRC) has revealed a drop in business confidence following the state’s increase in coal royalty tax rates.
The royalty rate for coal is determined based on the average price per tonne of coal sold, disposed of, or used in a royalty return period, with the state government introducing the new three-tiered royalty system from 1 July 2022.
QRC Chief Executive, Ian Macfarlane, said the State of the Sector report for the December 2022 quarter shows 60 per cent of resources CEOs are less confident about the sector’s future compared with ten per cent in the 12 months prior.
He said the drop in confidence in the industry’s future has impacted expansion plans for the sector, with only 35 per cent of CEOs now planning to expand their Queensland operations, compared with 55 per cent previously.
The proportion of CEOs now unlikely to expand their operations has increased from ten per cent to 30 per cent in the same period.
Just as concerning is that the number of CEOs feeling more confident about the sector’s future growth prospects is now a quarter of what it was in January 2022, plummeting from 60 per cent to an alarming 15 per cent.
Mr Macfarlane said Queensland’s future growth pipeline of projects – estimated by the Commonwealth Government’s Office of the Chief Economist to be between $103 billion and $142 billion worth of projects at the announced or feasibility stage – has been placed at risk.
“The rapid decline in confidence in the resources sector’s future prospects over the past 12 months is a direct result of the Queensland Government’s decision to dramatically increase coal royalty tax rates.
“Minerals, metals and refining projects are now at risk of being put on hold or cancelled as resources companies urgently review their investment plans for Queensland.”
Mr Macfarlane said a decision like this impacts the whole resources sector – from coal, gas and metals projects right through to critical minerals – because it signals the Queensland Government is prepared to make sudden changes to government policy, without industry consultation, to meet short-term political goals.
“Queensland has traditionally been a destination of choice for many large-scale, long-term resources investors because of its relatively stable and consistent regulatory environment, but that competitive advantage has now been lost.
“Resources projects in Queensland are now over-taxed and uncompetitive compared with other jurisdictions, including within Australia, which has placed jobs throughout our supply chain and the long-term interests of all Queenslanders at risk.”
