Resources Council says Queensland coal miners are victims of ‘world’s highest royalty taxes’

Set to announce billions of dollars in coal mining royalties next week, the Queensland government has been accused of turning its back on the areas responsible for supplying this bounty.

Boosted by booming international coal prices and a new royalty regime, the Queensland government is tipped to announce more than $5 billion in additional royalties when it unveils its next budget.

Former Federal Resources Minister and current Queensland Resources Council (QRC) spokesperson, Ian Macfarlane, says the state’s miners are being hit by the “world’s highest royalty taxes”.

According to Mr Macfarlane, the regional areas that house and support the Queensland coal mining industry are being especially hard hit.

He says regional Queenslanders are being threatened by loss of investment and jobs in the resources sector, while still waiting on the government’s promised spending boosts to services and infrastructure.

Government fails to deliver promised benefits

The QRC chief executive claimed regional council leaders have already begun to raise their concerns about the failure of the government to provide the benefits highlighted when it unveiled the new royalty scheme.

“If the Queensland Government is going to rip billions of dollars out of the resource sector, it should be making sure resources communities don’t pay the price twice,” Mr Macfarlane said.

“The regions have been poorly funded for government services and infrastructure for decades and are entitled to ask for their fair share.

“While the Government has publicly announced a long list of major regional projects, from hospitals to pipelines and community facilities, so far there’s been very little specific funding committed to these projects over the next four years.”

Mr Macfarlane said Queensland’s coal royalty tax rate is five times that of New South Wales and a number of future resources projects are now at risk.

“The cost to long-term investment and jobs in Queensland’s resources sector over the next five to 10 years from this decision will be absolutely devastating.”

He also suggested that the sudden rise in royalties without consultation had damaged Queensland’s reputation as reliable place to invest in new and established resources projects.

“This very real threat extends beyond coal to projects involving rare earths, critical minerals and hydrogen,” he said.

Coal royalty background

In explaining the jump in royalties it was receiving, the government suggested they were being introduced to ensure Queenslanders received “a fair return on the use of the state’s valuable and limited natural resources in periods of high prices.”

The government introduced three new tiers to the coal royalty structure, with effect for coal sold, disposed of, or used, on or after 1 July 2022. This included an additional tier with a rate of 20% on that part of the average price per tonne that is more than $175 but not more than $225.

A further tier highlighted a rate of 30% for that part of the average price per tonne more than $225 but not more than $300, while a third tier introduced a rate of 40% on that part of the average price per tonne that is more than $300.

The government estimated the new scheme would generate additional royalty revenue of around $1.2 billion over the four years ending 2025–26, significantly below industry estimates.

Calls for NSW to also lift its royalties

Interestingly, recent research by The Australia Institute estimated that NSW could have raised an additional $6.2 billion in coal royalties this financial year if it had adopted Queensland’s royalty system.

“NSW needs to wind down its coal industry and changing the coal royalty system should be a part of that,” said Research Director Rod Campbell from the Australia Institute.

“We don’t need to look far to see how this can be done. Queensland has already done it.

“This is billions in forgone revenue that could be invested in health, education, transport and a wage rise for NSW workers.”

According to Mr Macfarlane, that is not the case in Queensland.