Queensland Budget keeps royalties unchanged

JOHANNESBURG (miningweekly.com) – Queensland Treasurer Curtis Pitt brought cheer to the state’s resources sector on Tuesday, as he kept his government’s election promise not to increase royalty rates, but industry has raised concern about the Budget’s lack of support for exploration.

Queensland Resources Council (QRC) CEO Michael Roche said that although the 2016/17 Budget did not contain a royalty relief, Pitt had indicated that he would maintain the dialogue with the industry body on some modest reform proposals.

Roche raised concern, however, about the Budget’s failure to encourage exploration and the discovery of new minerals and energy deposits.

“For the first time in at least four years, the Budget contains no specific programme funding for precompetitive geoscience programmes through the Geological Survey of Queensland (GSQ). With exploration in Queensland languishing, this decision to slash funding to GSQ by half is hard to fathom,” he said in a statement responding to Tuesday’s Budget.

Roche criticised Pitt for not reinvesting some of the estimated A$9-billion that the state government would receive from royalties over the next four years in growing the resources sector.

Meanwhile, the Treasurer had agreed to partner with the QRC on its ‘Jails to Jobs’ proposal, which would transition offenders from prison into employment in the resources sector. Pitt had made A$1.3-million available for a pilot programme involving 30 Aboriginal and Torres Strait Islander offenders.

Roche has also welcomed the Treasurer’s recommitment to a review of financial assurance. He further acknowledged that Natural Resources and Mines Minister Dr Anthony Lynham had been actively promoting the need for an overhaul of the Land Court, but said that the Minister required the full backing of Premier Annastacia Palaszczuk and her government.

“We need to quickly move beyond reviews, to bring action on the cost and regulatory reforms outlined in a comprehensive QRC submission to the Palaszczuk government in March 2016,” Roche said.

LNG BOOSTS ECONOMIC GROWTH
Meanwhile, the Budget forecast that Queensland’s economic growth would be the strongest of all Australian states, with the economy expanding from 3.5% in 2015/16 to 4% in 2016/17, driven largely by the ramp-up of liquefied natural gas (LNG) exports.

Australian Petroleum and Production Exploration Association (Appea) reported that the value of Queensland’s LNG exports would increase to almost A$100-billion by the end of the decade.

“The value of LNG to Queensland’s economy is significant and long lasting, particularly in regional areas,” Appea Queensland director Chris Lamont commented.

He said that Queensland’s natural gas industry was forecast to contribute A$671-million in royalty revenue over the forward estimates.

Lamont said Queensland’s oil and gas industry welcomed the Treasurer’s comments that the resource industry had to be supported through the low commodity price cycle.

“The gas industry is and will continue to be a significant employer, particularly in regional Queensland. We now need to build on successes to date and look forward to working with government to reduce costs and encourage growth,” he said.