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How to resolve AdBlock issue? Queensland mining sector’s record coal royalties will cover extra infrastructure spending
THE Queensland Resources Council projects record coal royalties of $3.7 billion this financial year which will pay for the Palaszczuk Government’s extra infrastructure spending across the State.
QRC Chief Executive Ian Macfarlane said the projection of $3.7 billion –a $536 million increase on the Government’s pre-Christmas estimate – would allow it to increase infrastructure spending by $1.4 billion to $11.5 billion, and a total of $45 billion in infrastructure over four years.
“Projects like Convention Centre expansion in Cairns, the North Queensland Stadium in Townsville, the M1 in south-east Queensland will be built and funded by coal,” Mr Macfarlane said.
Mr Macfarlane said the increased projections was due to the strong international demand for metallurgical coal and the stable prices for both metallurgical and thermal coal from Queensland.
“This result would make 2017-18 a record 12 months for coal royalties in Queensland. The previous record was $3.4 billion in 2016-17,” he said.
“What does $3.7 billion in coal royalties mean for Queenslanders? It means their Government has $740 to spend on each of the five million Queenslanders.
“The increase in royalties of more than $500 million is the alone is equivalent to the wages for more than 7000 teachers or 7000 nurses, who are so crucial for our health and education systems across the State.
“It is fitting the Government is currently meeting in the Mackay region, which is traditionally the biggest contributor to coal royalties. We anticipate the royalties from the region could exceed $2.3 billion.
“Before Christmas, the Palaszczuk Government confirmed a $414 million increase in royalties this financial year. QRC now expects the Government will reap another $536 million more – or an extra $950 million – this financial year. These increases in royalties give the Palaszczuk Government the opportunity to invest more in Government services and cover almost all of extra $1.4 billion the plan to spend on infrastructure across Queensland in 2017-18.
“In term of the Budget bottom line, the increase means forecast net operating surplus will be now in excess of $1 billion.”
Mr Macfarlane said the role of Aurizon cutting train services to move coal through the Central Queensland Coal Network to export ports was extremely damaging for the industry, the Queensland economy and the State Budget to be delivered on 12 June, wiping up to $500 million off the Government’s royalty expectations.
“The only dark cloud on the horizon for the industry and the Government is Aurizon. It’s maintenance changes in the Central Queensland Coal Network, by Aurizon’s own admission, will stop the movement of up to 20 million tonnes of coal each year,” he said.
BACKGROUND
In December, the Palaszczuk Government’s 2017-18 Mid Year Fiscal and Economic Review (MYEFR) projected coal royalties would be $3.4 billion based on prices assumption for hard coking (metallurgical) coal of US$161 per tonne, semi-soft (metallurgical) coal at US$129 per tonne and thermal coal at US$83 per tonne.
Based on price trends over the year to date, QRC’s projects are based price assumptions for hard coking (metallurgical) coal of US$180 per tonne, semi-soft (metallurgical) coal at US$127 per tonne and thermal coal at US$97 per tonne.
In MYEFR, the Palaszczuk Government projected a net operating surplus of $485 million for 2017.
The QRC is the peak representative body for Queensland ‘s resource sector. The Queensland resources sector provides one in every $6 dollars in the Queensland economy, sustains one in eight Queensland jobs, and supports more than 16,400 businesses across the state, all from 0.1 percent of Queensland’s land mass. In the latest ABS trade data, the Queensland resources sector contributed almost 80% - or $55 billion - of Queensland’s total merchandise good exports of $70 billion over the last 12 months.
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