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| Thu, 22nd Dec 2022 14:26:00 |
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Campaign against coal royalty increases could backfire, Queensland treasurer warns mining lobby |
The Queensland treasurer, Cameron Dick, says the state will not back down on recent coal royalty increases, warning the mining lobby its multimillion-dollar advertising campaign opposing the changes may harm the industry.
Dick met with the Queensland Resources Council this week to ensure it was “under no misapprehension” the government would stay the course on the new progressive royalty tiers, which increase when prices are unusually high and companies are making windfall profits.
He told Guardian Australia the mining lobby – which has threatened to spend $40m on ads opposing the changes until the 2024 election – risked harming the coal sector in the process.
“The risk for the QRC is the more they keep campaigning, the greater the chance is that the cost of the social licence for coal will continue to go up,” Dick said.
“So it would be better for industry to work with government and the community, particularly regional communities, to explain the benefit of metallurgical coal in the continued delivery of steel so we can move forward to a low-carbon economy, support jobs, support regional communities and have a prosperous future for our state.”
The royalty increases have been in place since the start of the financial year and are expected to deliver $3bn in additional revenue to the state government. The Queensland Treasury has said the changes have had little impact on corporate profits from coalmining, and that global prices had increased the value of exports to a record $79.7bn for the 12 months prior to September.
When the government announced the changes it acknowledged the likelihood of a fight with the mining sector, but some within Labor remain nervous about the prospect given past campaigns.
The national mining lobby spent $22.2m in six weeks in 2010 campaigning against the Rudd government’s plans to introduce a super-profits tax, then successfully negotiated a compromise when the prime minister was replaced by Julia Gillard.
Campaigning by coalminers – most notably Adani – was also credited with damaging Labor’s standing in regional Queensland ahead of the 2019 federal election.
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Already this year, the premier, Annastacia Palaszczuk, backed down from a fight over land tax rules in the face of a sustained campaign by the real estate industry and some media outlets.
Asked about whether the government could change its position on coal royalties if media or industry pressure came to bear, Dick said the new regime would not change in any circumstances.
“There were particular implementation challenges [with land tax changes] that do not apply to royalties,” he said.
“The [new royalty arrangements] have been implemented. They’re now being paid for the benefit of Queenslanders and they’ll be allocated for the benefit of regional Queensland.
“The government’s view is clear and that has been expressed directly to the QRC so there is no misapprehension – the government will not be changing our new progressive coal mining tiers.”
The QRC’s campaign, aided by comments from coal companies and the Japanese ambassador, argues that miners would be disinclined to invest in Queensland compared to other jurisdictions. The ambassador, Shingo Yamagami, has argued the changes “could damage the trust in Queensland and beyond as a safe and predictable place to invest”.
Dick said the government had honoured a previous 10-year freeze to royalties and that he had been willing to discuss a similar long-term arrangement to lock in the new rates.
“I raised with them the duration of the new policy framework as an issue I was willing to discuss and I received nothing back from the QRC or industry,” Dick said.
“After honouring a 10-year royalty freeze we took steps to ensure the people of Queensland are getting their fair share from the coal they own when it’s mined and sold.
“What the industry needs to take some comfort from, those new royalty tiers only impact companies when profits are supernormal. They have zero impact at the historic prices at which investment decisions were made about extracting coal from Queensland.
“Investment continues across Queensland, both in the coal industry and in other minerals and natural resources, and that has continued since the royalties were announced.”
The QRC’s chief executive, Ian Macfarlane, said the state’s resources sector has an “important role to play in a decarbonised future” and has committed to working with governments to achieve that.
“It also has a crucial role in meeting the energy and infrastructure needs of our international trading partners, and that demand will remain for many years to come,” Macfarlane said.
“The Queensland government’s decision to introduce the royalty tax increase on both thermal and metallurgical coal without any proper consultation with the industry has seriously jeopardised future investment, supply, and jobs.”
He said the QRC is “open to meaningful engagement” with the government over coal royalties.
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