Companies

Sep 12, 2012

The coal industry’s new enemy: Campbell Newman

Queensland's coal royalties decision is just one face of the sovereign risk confronting miners as governments struggle with budget logic. In the end, no one wins.

Alan Kohler

Business Spectator editor-in-chief

At least Queensland coal miners now have a face to put on their dartboard — that of Premier Campbell Newman.

21 comments

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21 thoughts on “The coal industry’s new enemy: Campbell Newman

  1. GeeWizz

    Under the Gillard/Rudd Mining tax agreement the Federal Government promised to compensate the mining companies for any increases in state royalties.

    That means it won’t cost the mining companies a cent, but it will cost the incompetent federal government billions because of their flawed mining tax policy which is probably unconstitutional.

    BTW, good to see Clive Palmer out there attacking the LNP, just goes to prove the lefties who said Clive was running the state have absolutely no clue.

  2. SBH

    Alan, how is the community helped by your inaccurate use of the term “sovereign risk’. When did it stop being the risk of action by a central bank which made loan repayments by government less likely and become analogous to any risk at all created by government?

  3. SBH

    moderation? you’re kidding!

  4. Scott

    @Geewiz

    I think the miners can only use the state royalties as a deduction to their MRRT liability…i.e if the have to pay $200 million to the Feds and the state royalty is $150 million, their net MRRT liability is $50 million.

    Problem is that if they don’t have any MRRT liability (i.e they don’t hit the threshold for profit), they will still have to pay the increased state royalty. So the bigger miners will be fine (as the royalties will help reduce their MRRT liability), but the smaller miners will have to reduce costs in other areas, by laying off workers and closing mines.

    We just can’t help trying to kill the golden goose.

  5. Steve777

    I thought it was only ‘sovereign risk’ if a Labor government did it. I looked up the definition: “Sovereign Risk: anything that a Labor government does that business leaders don’t like, particularly if involves taxation or regulation”.

  6. GeeWizz

    Under our constitution the mineral belong to the states.

    Queensland has ever right to increase mining royalties for the minerals that they own.

    Federal Labor were 2 smart by half trying to get their cut of the deal which is probably unconstitutional and therefore illegal anyways.

  7. Scott

    @Geewiz

    Sure, QLD are entitled to do so. But is it a good idea? I don’t think so. QLD would have been better to try to increase investment in Coal mining and make it easier to attract workers, which would have fed into royalties, stamp duty and payroll tax.

    The Goose has shown signs of weakness lately. Do you try and squeeze a couple more eggs out before the goose dies, or add a little TLC and try to get the goose back to full health?

  8. SBH

    Where does the ‘constitution’ say that wizz? When you find it let Twiggy Forrest know because he couldn’t find it when he wanted to go to the High Court over that very issue.

    You’re not just making stuff up again are you?

  9. Merve

    I will just sit here quietly and wait for Tony Abbott to jump up and down about the big bad mining taxes in Queensland and Western Australia his colleagues are raising. How many jobs and how much investment are they costing us, Tony?

  10. Steve777

    The minerals belong to the ‘Crown’, i.e. the Australian people (current and unborn), not ‘the States’ (nor the Federal government nor the Queen). The Constitution does not mention minerals, so prima facie, the power to legislate in relation to minerals and mining within State boundaries remains with the States. However, many of the Commonwealth’s powers are relevant to minerals and mining and any legislation of the Commonwealth based upon these powers will override any inconsistent State legislation. The Commonwealth has full jurisdiction in the ACT, NT and also offshore below the low water mark.

    So, the minerals in Qld belong to the people of Queensland but also to the people of Australia. Common sense and good will (not much of either around these days) will mean that miners, Queenslanders and Australians all get their fair share.

    Queensland is within it’s right to increase royalties as it did. Whether that is a good idea is another question. And it appears that the Federal government severely stuffed up in its negotiations with the miners to find itself in the position of having to refund increases in state royalties.

    As to constitutionality of the MRRT – I’m not an expert but there are enough powerful, well funded interests opposed to it who I am sure have considered this possibility so if there was any serious question I’m sure that someone would have mounted a legal challenge.

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