Queensland's New Coal Royalties Law Ruffles Feathers

The Queensland Resources Council is speaking out against a recently passed coal royalties bill, saying that it hurts the Australian state's competitiveness and creates risks for its economic security.

Passed on September 12, the bill "safeguards progressive coal royalty tiers from (the Liberal National Party's) tax cuts," according to a statement released by Queensland's Labor Party government.

Explanatory notes indicate that the bill is designed to protect against the modification or removal of progressive coal royalties. David Crisafulli, leader of the opposition, has indicated these actions could be taken should his party form the government in Queensland in the future. Other members of parliament have echoed these comments.

"Without the change proposed in this Bill, modification or removal of progressive coal royalties could occur without adequate public or parliamentary scrutiny," the explanatory notes read. The bill will force any future decrease in coal royalty taxes to be legislated, making it harder for future governments that wish to make changes.

Speaking about royalties at a Queensland Resources Council lunch earlier this year, Crisafulli reportedly told mining companies, "What we take to the election at the end of this year you will be able to take to the bank."

The Queensland Resources Council said the state has the highest coal royalty tax rate in the world, a situation that is damaging companies' ability to explore for the energy fuel and bring new mines online.

“The people of Queensland would have instead benefited from Government working with our industry to strike more balanced royalties to provide a positive economic future for our state,” said Janette Hewson, CEO of the group.

Progressive coal royalty tiers were first introduced in June 2022 as part of the state's budget.

According to the government, they are “designed to ensure Queenslanders receive a fair return on the use of the State’s valuable and limited natural resources during periods of high coal prices.”

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.