The Queensland government will continue to collect billions of dollars from coal companies in the years to come by making the massive tax on coal profits permanent.
This move comes in response to Queensland’s spiralling debt, which is expected to reach more than $180 billion (US$118 billion) by 2027, up from the current $109.8 billion.
The main driver of this debt is $96 billion in infrastructure spending, including new renewable energy projects, public housing, and hospital expansions.
The bill mandates that any changes to the coal rate must result in a rate that is at least as high as the current one.
The record revenue raised from coal royalties has funded more than $16 billion in critical economic and social infrastructure and essential services across the state, along with $1,000 in energy rebates that will commence from July 1.
The government said the “progressive nature” of the royalty tiers means they “only apply during periods of high prices, when coal producers are benefitting from extra-ordinary returns.”
“There would be no quiet Friday afternoon regulatory changes under any future Queensland government,” Mr. Dick told parliament on May 24.
“Any reduction to the coal royalties will be subject to the scrutiny of the people of Queensland through their parliament—as it should be.”
Starting July 1, the state government will charge a 20 percent tax on each tonne of coal sold for more than $175 per tonne; 30 percent for prices above $225; and 40 percent for prices above $300.
Previously, Queensland’s coal royalty tax was a flat rate of 15 percent per tonne, yet it was already one of the highest in the world. In the Australian states of New South Wales and Western Australia, coal royalties are under 10 percent.
Backlash from Industry and International Investors
However, the super coal tax has faced fierce opposition from coal lobby groups, which argue the law would deter investment in Queensland and risk jobs.
In 2022, Japanese ambassador to Australia Yamagami Shingo warned that the hike could affect Japanese firms’ investment plans in Australia.
“Make no mistake, this is a huge shock for Japanese companies,” he told members at a meeting with the Faculty of Engineering, Architecture, and Information Technology at the University of Queensland (UQ).
“The future of the successful partnership between Japanese businesses and Queensland, as a competitive investment destination could be at great risk.”
The ambassador added that the effect of the new coal tax is “beyond the coal industry,” as Japanese companies are also involved in hydrogen development, infrastructure, and cutting-edge technologies.
“Some Japanese companies are already questioning whether Queensland will continue to be the safe and predictable place to invest that they had known for decades,” Mr. Shingo said.
The Liberal National Party opposition has indicated it will not change the tax, as it is integral to the budget forward estimates.
