Queensland’s resources sector fast losing confidence in sector regulation

Australian Institute of Geoscientists > News > Queensland’s resources sector fast losing confidence in sector regulation







A long-running quarterly Queensland Resources Council survey of resource company CEOs has found that confidence in the regulatory environment in Queensland is at a near-five year low.

QRC Chief Executive Michael Roche said compared to a year ago, the latest findings revealed a stark change in the confidence of the 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,’ Mr 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 also reveals that 44 percent of CEOs said that costs such as infrastructure charges, royalties and other taxes and charges were somewhat of 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,’ Mr Roche said.

As one company CEO put it:
“See how long a mayor would last if they proposed a 500 percent increase on all ratepayers.”

Mr Roche said the majority of respondents to the survey did reveal 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,’ Mr Roche said.

‘I have written to Premier Annastacia Palaszczuk in the wake of the results from our latest survey in the hope that the government will recognise the damage being done to industry confidence due to the uncertainty.

Mr Roche said that the so-called Chain of Responsibility law enacted just over three weeks ago is causing enormous angst and uncertainty in the business community.

‘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.

One CEO put it this way in responding to the QRC survey:
“Recent state government proposals and regulatory changes appear reactionary and populist.”

‘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.

‘The resources sector contributes directly and indirectly one in every $5 of the State’s economy and is responsible for one in six jobs, while also contributing $2.1 billion in royalties to the government in the last financial year.

‘That $2.1 billion was the equivalent of funding the salaries of 35,000 teachers, 30,000 nurses or about 32,000 police officers.

‘The state collects zero royalties from mines that close and from projects that are cancelled.’

Queensland Resources Council, 16 May, 2016