The Queensland government will become one of the first to impose higher taxes on coal producers, in the wake of surging global prices, through a budget that was otherwise light on new funding for clean energy projects.
Handing down the Queensland state budget on Tuesday, Treasurer Cameron Dick said higher royalty fees would be imposed on coal producers for the first time in a decade, saying surging global coal prices meant it had become time for coal companies to contribute more by way of state taxes.
“For a decade, multinational coal companies have benefited from royalty arrangements that have been frozen by successive Queensland Governments,” Dick said.
“Few industries in the world have enjoyed such a long period without change. But from 1 July, the 10-year freeze comes to an end.”
“Arrangements that reflect coal prices in excess of $500 per tonne, not the $150 per tonne for which the existing royalties were designed.”
Under the new arrangement, coal producers will face three tiers of royalty payments, with higher rates imposed as the market price for coal increases. The higher rates will kick in for coal prices above $175 per tonne – rising to a 40 per cent royalty rate for earnings about $400 per tonne.
The new royalty tiers are expected to raise an additional $1.2 billion in payments to the state government, which it has committed to spending on regional infrastructure.
When it came to clean energy, the budget included little by way of surprises and new commitments and mostly confirmed the Queensland government’s existing commitments to the development of new renewable energy zones and hydrogen hubs.
But Dick said the state government’s previously announced commitments to support clean energy projects and low emissions industries would deliver high skill and highly paid jobs for the Queensland workforce.
“As Queensland’s economy continues to gather speed, our government is actively seeking to identify and support the industries that will deliver the well-paying, secure, highly skilled jobs of the future,” Dick said in his budget speech.
“That means jobs in hydrogen and renewables, critical minerals, advanced manufacturing, resource recovery, biomedical technology, aerospace, defence, tourism and the innovation, creative and design industries.”
“We are determined to maintain Queensland’s traditional role as Australia’s energy powerhouse.”
The budget includes a $35 million commitment to fund the completion of additional feasibility studies of new pumped hydro energy storage projects. This includes a previously announced $22 million funding commitment to explore a new pumped hydro storage project in South-east Queensland at the Borumba Dam.
The budget also confirmed Queensland’s commitment to providing $3,000 in subsidies for the purchase of new zero emissions vehicles – with $55 million available over the next three years – under a plan first announced back in March.
The release of the Queensland state budget came just hours after the New South Wales budget was released. NSW Treasurer and energy minister Matt Kean used his first state budget to link the state’s additional investments in clean energy infrastructure to the state’s future prosperity.
But seemingly following his NSW counterpart’s lead, the Queensland treasurer said that increasing the supply of new low cost renewable energy and supporting the development of new critical minerals industries would help underpin stronger economic growth.
“Embracing decarbonisation does not need to come at the expense of the economy or jobs,” Dick said.
“To the contrary, it presents the opportunity for us to be a home to more energy-intensive heavy industry, including traditional and advanced manufacturing.”
“Queensland can supply the world with new economy minerals and manufacture the equipment it needs to tackle climate change, while supporting our growing workforce to acquire new skills.”
“By investing in renewable generation now, Queensland can leverage our world class renewable resources to deliver a reliable and efficient energy system.”
