Queensland CEOs losing confidence in resources regulation – survey

PERTH (miningweekly.com) – Confidence levels among resource company CEOs in Queensland are at a near five-year low, a Queensland Resources Council (QRC) survey has found.

QRC CEO Michael Roche said compared to a year ago, the latest findings revealed a stark change in CEOs' confidence about regulation and doing business in Queensland.

“This time a year ago after a change of government in Queensland, our sector deemed it business as usual for the resources sector, but in the space of 12 months a lot has changed,” Roche said.

“While the Labor government's commitment to royalty stability for its first term of government is welcome there has been anything but stability elsewhere in the regulation of the sector.

“Our sector has been the target of a raft of regulatory changes – some enacted – and many more proposed – therefore, it’s little wonder the resource leaders’ sentiment has substantially changed.”

The survey revealed that 44% of CEOs said that costs such as infrastructure charges, royalties and other taxes and charges were somewhat or significantly more expensive in Queensland than in other jurisdictions.

“One of the biggest issues facing our sector is that in recent years the sector has been loaded up with significant increases in local government rates and this came to the fore in the comments from the sector bosses,” Roche said.

He added that the majority of respondents to the survey revealed that if the state government were able to reduce industry costs, such as royalties, this would improve the business outlook.

“While the QRC is getting a good hearing from Treasurer Curtis Pitt and Mines Minister Anthony Lynham, elsewhere our government continues to deliver nasty surprises and poor policy,” Roche said.

One of these was the so-called Chain of Responsibility law, which was enacted just over three weeks ago, and was causing angst and uncertainty in the business community, he said.

The law was aimed at preventing irresponsible businesses from leaving the state’s taxpayers to foot environmental clean-ups, and allowed environmental protection orders to be issued to a third party that had some relevant relationship to a company in financial difficulty.

“QRC had no disagreement with the government's intent with that new law but, as we feared, it has gone too far and is doing serious damage to investor confidence,” Roche said.

“The QRC is working with companies and the government to make this a great state to do business in, but if the government’s approach towards policy and regulatory stability does not change then investor confidence could keep spiralling down further, leaving taxpayers out of pocket.”

However, Lynham has disagreed with the QRC’s assessment, saying that green shoots were appearing in the Queensland resources sector, despite the low commodity prices.

Pointing to a number of current investments in the sector, including Rio Tinto’s A$2.6-billion spend on the Weipa bauxite project, and Adani’s A$17-billion Carmichael coal, rail and port project, Lynham said that while conditions remained tough it was not all “gloom and doom”.

“International markets are beyond the control of any individual government, but there are things we can and are doing to assist the industry and the communities it supports.

“We are fulfilling our election commitment for a royalties freeze. We have the lowest payroll tax in the country and we are investing heavily in innovation. We have given explorers a 50% reduction in the expenditure that they have to commit to their mineral exploration permit.

“This will provide some relief while the market recovers, and importantly, will keep explorers investing in Queensland, which is vital for the long-term health of the mineral sector,” Lynham said.

The Minister added that the industry continued to have a direct line to government through the resources Ministerial roundtable, which he chaired, with representatives from the coal, petroleum and mineral sectors.