More rent-seeking, falsities in QRC report on royalties

Long-term mining investment will continue and overall production will increase in Queensland despite recent scaremongering from the state’s resources council, the CFMEU says.

District President Stephen Smyth said a recent QRC survey of mining companies did not portray the realities of what those companies have officially reported to the Bureau of Resources and Energy Economics (BREE).

Mr Smyth said the Bureau’s latest official statistics showed the reality of a massive continued investment and production rising into the future, despite recent prices price declines.

“Reports of the death of the Queensland mining industry have been greatly exaggerated,” Mr Smyth said.

“While much has been made by what mining company bosses have told the QRC, what those same bosses have reported to the official resources bureau paints an entirely different picture.

“Many of those companies claiming they’ll reduce operations are continuing to invest. And while some speculative projects - and some mines with higher costs - are cut back, firmly committed investments and expansions will continue.

“This is yet another example of why we must pay attention to what mining companies do rather than what they say. 

Mr Smyth explained the discrepancy between the survey and the Bureau’s official statistics as basic rent-seeking.

“We’ve seen this approach in their opposition to the proposed RSPT, the MRRT, when anyone mentions reducing their diesel subsidies and we see it in their continued lobbying to reduce workplace conditions, vital approval processes, important environmental controls and now, royalties.

“While the CFMEU prefers to see companies taxed under the MRRT, it’s worth dispelling the QRC’s myths about royalties:

• Its claims that coking coal companies are operating with an effective tax rate of 50 per cent are ludicrous. The reality is that corporate income tax is paid only if a profit is made, and royalties are deductible before income tax is calculated.

• The claims that Queensland is the highest taxing coal jurisdiction in the world is complete rubbish. Countries around the world recognise that resources belong to their citizens, not multinationals, and countries like Colombia (one of Australia’s chief coal competitors) have effective tax rates of up to 80 per cent.

• Finally, seeking lower company taxes, when it is the same tax rate faced by all companies in Australia, is shamelessly seeking corporate welfare, which would have to be paid for by higher taxes on ordinary working Australians. 

“Industry cutbacks we’re seeing now are the direct result of a correction in the unsustainable dash for cash-style approach to mining investment apparent since the start of the boom.

“Companies addicted to ludicrously inflated prices are now being forced to work a bit smarter and rather than do that, they’re simply cutting what is not guaranteed to deliver them super profits. 

“Let’s not forget that many Bowen Basin coking coal mines were viable when coal was US$60 a tonne and it’s still much more than that now.”

“Mining companies have gone from making money hand over fist to a situation where they must work like every other business in Australia – within their means.”

Contact: Martin Watters 0400 179 620