Yet another set of recently released figures have confirmed how important the resources sector, and particularly coal, is to the state and national economies.
Resources and energy exports are forecast to hit a new record this financial year of $464 billion, according to the Resources and Energy Quarterly (REQ) report prepared by the Chief Economist within the Federal Department of Industry, Science and Resources.
More than a quarter of that record figure – $128 billion – will be from metallurgical and thermal coal.
It’s an outstanding result that reflects the strong prices driven by solid international demand for our coal.
Under the longstanding, stable royalties system that has always applied to coal and other commodities, record exports translate to record taxes and royalties being paid by resources companies to the Federal and Queensland Governments to fund the roads, hospitals, schools, police and other public services and infrastructure we all rely on.
The metallurgical, or coking, coal produced in Queensland is helping our international trading partners meet their growing infrastructure needs and these figures also confirm just how important the industry is to our state’s economic wellbeing.
The REQ report predicts demand for coal, particularly from India, will remain high over the forecast period and metallurgical coal prices will remain well above the official Queensland Treasury Budget forecasts. This means the State Government will receive much higher royalties than the $800 million previously forecast, and coal producers will contribute more than $5 billion in this period as a result of the higher tax rate.
Despite the claims of activists, there is a really good story to tell about our coal sector, and the hard-working women and men who make it such as critical part of our economy.
That’s why the findings of the QRC’s latest State of the Sector report are very concerning.
It found an alarming level of pessimism by QRC member CEOs about the outlook for our sector. This pessimism is not because of commodity prices or global influences, but the direct result of the Queensland Government’s short-sighted decision to dramatically increase coal royalty taxes to the highest in the world.
The report tells a very sobering story about the long-term damage being caused by the Government’s decision.
The number of CEOs who now say it is unlikely they will expand their operations in Queensland has tripled over the past 12 months to 30 per cent.
The number feeling confident about the resources sector’s future growth prospects has fallen from 60 per cent to just 15 per cent.
While the Government’s royalty tax targets coal producers, the impact on business confidence is being felt across all commodities. It will take five to ten years for the full impact of the royalty tax increase to be felt, which is why we are taking such a strong stand now through our Keep Qld Competitive campaign.
Without resources companies taking on the high risks associated with investing billions of dollars into new long-term, large-scale projects in Queensland, future jobs and economic opportunities are at risk.
Please join the conversation urging the Queensland Government to reconsider its decision.
Stay up to date with our campaign at keepqldcompetitive.com.au
Ian Macfarlane
Queensland Resources Council Chief Executive
