By Ian Macfarlane, Queensland Resources Council chief executive >>
ON BEHALF of the 282,000 men and women working in the Queensland resources industry, can I say how proud we are of the industry’s contribution to the State Budget.
Within the pages of the Budget, the Palaszczuk Government has confirmed royalties from coal, minerals, petroleum and gas will be $4.327 billion this financial year and it projects royalties paid to the Government will be more than $20 billion between now and July 1, 2023.
For every man and woman working in the resources sector - from Weipa to Wynnum, from the Cooper Basin to Coorparoo - they will each generate more than $72,000 over the next five years for the Government to reinvest in vital services and infrastructure across our State.
These royalty payments are in addition to more than $1 billion per week the industry generates in exports. Indeed, we deliver almost 80 percent of Queensland’s total overseas trade in goods.
As well, Queensland’s export growth -- in resources, in agriculture, in tourism -- has always been based on investing in infrastructure. Economic infrastructure drives regional growth. The Queensland Resources Council applauds Deputy Premier Jackie Trad for investing the dividends of today’s growth in the infrastructure to drive tomorrow’s growth.
The opportunity for Queensland with increased overseas demand, particularly for increased spending on infrastructure, renewable energy projects and electric vehicles, is for our resources industry to grow – to increase jobs to more than 300,000, to increase exports to more than $60 billion and, of course, to maintain the increased revenue flow from royalties into the State Government to the benefit for all Queenslanders.
The risk is dramatic changes in policies, including changes to the rates of royalties and applying additional layers of regulation.
In terms of royalties, only now is the 2012 move to increase the rates by the Newman Government taking effect with the high and stable prices for metallurgical coal required for steel-making. It would be a grave mistake – and a risk to its own projections of $20 billion in royalties – for the Palaszczuk Government to revisit these rates.
There is strong international competition for investment in resource projects and market share for resource commodities. Higher prices for prized commodities, such as metallurgical coal, only opens the door to less attractive deposits overseas being developed and less competitive suppliers being more aggressive in our traditional markets.
Queensland cannot afford to be complacent about recent reports that US suppliers are seeking to make in-roads into our well-established Japanese markets due to supply concerns as a result of actions by Aurizon.
Similarly, the Queensland resources industry works within very strict environmental and workplace health and safety regulations -- and necessarily so.
Successive governments have set these regulations in place, and we should be proud of and promote internationally the high benchmark set, particularly when we look at more lax regimes elsewhere around the world. Our industry, like all industries, needs to ensure it manages its impacts and provides a safe working environment.
That said, additional regulatory burden, particularly implemented with little or no consultation, adds further costs and deters international investment looking for stable, safe and secure projects to develop the resources the world needs.
Already the Fraser Institute Annual Survey of Mining Companies, released in February 2018, reports that while Queensland was third of 92 international jurisdictions for “mineral potential” and fifth for “availability of labour and skills”, Queensland is falling to 12th for “investment attractiveness” impacted by its 68th position for “uncertainty about environment regulations”.
Ahead of the State Budget, the resources sector’s contribution of extra royalties was likened to the actions of “a white knight on a trusty steed”.
The industry will continue to deliver if policies, particularly on royalties, are stable and we can work with the Government on a shared commitment to growth. We want a partnership and ahead of the next Budget and the next election, the industry certainly does not want to be like the Kerrigan family reading the classifieds to see how much it costs to buy a pair of jousting sticks.
Instead, we can help make Queenslanders’ dreams a reality.