‘Excessive’ tax could ‘kill’ mining boom says advocate

Extreme government revenue raising could risk destroying a recent jump in resources activity, an industry defender said.

The Queensland Resources Council is deeply concerned the State Government could ruin the latest commodities boom, if it insists on imposing the “world’s highest coal royalty tax rates”.

“This is an excessive level of taxation that is unprecedented and completely unsustainable [because] it will kill the golden goose that has supported Queensland throughout COVID,” QRC CEO Ian Macfarlane said in a public statement.

“I can assure you Queenslanders, already worried about increases in the cost of living, will not want to experience a downturn in the resources sector.”

The remarks came after a taxpayer-funded advertising campaign promoted new tiered royalty rates of up to 40 per cent once the average coal price per tonne exceeds $300.

“As Queenslanders we own the coal that is extracted from our state [and] that is why mining companies pay us royalties when they sell it. Lately the price of coal has risen greatly [and], in times of boom, we want to share the boom,” the campaign video said on YouTube.

“When coal prices and company revenue increases the royalty will also increase [and], when world prices are low, the royalties will reflect this. It is fair [and] it is a return for all Queenslanders to support our jobs, services and lifestyle.”

However, Macfarlane warns the government’s plan to tax its way to prosperity will ultimately fail to raise as much revenue as promised due to weaker growth.

“By increasing coal royalty rates to the highest levels in the world, the Queensland Government has put a big black mark against our state’s name with investors. This will affect investment in current and future resources projects, because companies are more likely to invest in states and countries which have more reasonable and stable tax regimes,” he said.

The resources industry is forecast to contribute $18.3 billion in taxes by the end of the 2023 financial year. Employers will have to pay an extra $6.7B in the next year due to the royalty hike.

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