Queensland expects A$2.7bn royalty write-down

JOHANNESBURG (miningweeekly.com) – Queensland Treasurer Curtis Pitt has said that mining royalties would be A$2.7-billion less that what the state government forecast six months ago.

According to ABC News, the Treasurer also said on Tuesday that state taxes would be A$350-million lower than the mid-year update, citing the mining downturn.

The royalty write-down ahead of next week’s Budget came as no surprise to Queensland Resources Council (QRC) CEO Michael Roche, who said that the commodity price forecast in last year’s Budget and the mid-year review were “far too bullish”.

“Our sector does not control commodity prices; however, our sector has been punching above its weight when it comes to production outputs.”

Roche stressed that the volume of resource commodities exports continue to be at records levels. Queensland exported 19.5-million tonnes of coal in May, up from 17.9-million tonnes this time last year. For the 11 months of this financial year, exports were at 202-million tonnes, compared with 199-million tonnes at the same time last year.

The gas sector exported nearly 1.5-million tonnes of liquefied natural gas (LNG) to 13 different counties during May, after its A$70-billion dollar investment in Queensland.

“While Queensland has enjoyed a huge revenue windfall from the commodity price boom, it’s not correct to refer to ‘a post-boom mining economy’ as if somehow all mining has suddenly stopped in Queensland. The state has just seen a once-in-a-generation investment phase that has delivered our economy much greater production capacity in existing resource industries and established brand new export industries like LNG,” Roche commented.

The reason state taxes were lower was owing to the greater capacity, which meant that despite weak prices, Queensland resources companies still contributed significantly in revenue through royalties, payroll tax, land rents and stamp duty.

The 2016/17 Queensland Budget will be tabled in the State Parliament on June 14.