One thing I will miss about the outgoing Queensland Labor Government is the promotion that it gave to the fantastic Queensland coal industry.
You couldn’t miss the billboards and Youtube ads saying coal paid for this and coal paid for that. It was a nice touch from a government that cheered for the impending demise of the coal industry. At least they were recognising the wealth from coal does help us pay for a lot of important things.
The ads were highly misleading, however. The Government had massively increased royalties during the Ukraine war induced energy crisis. Coal prices went to stratospheric levels. So the Queensland Government jacked up the rates on higher coal prices. Higher rates were applied on coal sold for more than $150 per tonne and the top royalty rate hit a punishing 40 per cent of revenue at prices over $300.
Prices have come down to more normal levels now, however. The increased royalty rates are probably only increasing revenues by about $2 billion per year. The problem is the cost of free kindy, electricity rebates, 50c public transport fares amounted to $11 billion. And, that was before you added the cost of free school lunches.
All this means that the Government has spent its Christmas bonus many times over, and now left us all with a big credit card bill. When Labor came to office, each Queenslander owed an average of $15,000. At Labor’s last budget, this debt was due to grow to $28,000 per person.
One of the hardest jobs for the incoming LNP Government will be to fix the parlous state of our finances. More discipline in spending your money will be part of that answer but we will not make real progress until we reorient policy towards promoting economic growth, including investment in our resources sector.
We have just been through the biggest commodity price boom in Australia’s history. Post the Ukraine war, our terms of trade reached higher levels than it did after the Global Financial Crisis. Yet investment in mining has been $60 billion lower per year than it peaked at during those prior terms of trade boom.
We are living off the mines that had been built a decade or more ago. There have been very few expansion projects funded in recent years – the Adani project, built despite much opposition from the Queensland Labor Government, is an exception.
If we do not start attracting investment soon our current mines will get close to their end of the life. If they do close thousands of jobs would be lost across Central Queensland.
The trick to attract more investment is to give confidence that Queensland is once again open for business and that we will support projects that create jobs and wealth for our state. We need to remove the red tape that is crushing so many operations. I have spoken to some mines that have seen their costs double in recent years.
We need to spend less on flashy ads saying that coal can fund this and fund that. Just show some pride in the hard working men and women in the industry. Help businesses solve problems, rather than put up hurdles in their way. Then maybe in the future coal can fund a lot more needed public services. Not by jacking up taxes again but by growing the pie so that we can have more tax revenue, more jobs and more wealth for all.
Hon Matt Canavan
Senator for QLD
