The Queensland State Government’s budget has raised the petroleum royalty rate.
Premier Annastacia Palaszczuk and Treasurer Jackie Trad released their state budget yesterday, which included increasing the petroleum royalty from 10 per cent to 12.5 per cent, generating an increase of $476 million over four years.
“Ten years ago we were exporting no LNG and now we are one of the top three exporters in the world,” Ms Trad said.
“With a record amount of LNG exports, we believe it’s time for that industry to do a bit more now.”
The move was not welcomed by the industry, with Australian Petroleum Production and Exploration Association (APPEA) Chief Executive Andrew McConville saying the state was penalising an industry that was providing thousands of jobs.
“The treasurer has unfortunately determined to use the blunt instrument of tax increases rather than promoting investment and growth to increase long term revenues,” he said.
“Increases in royalty rates, however structured, increase the cost of gas production and undermine the long-term stability that is needed to continue to attract investment in Queensland.
“An announcement with no consultation, will be very carefully reviewed by current and prospective investors.”
Mr McConville said with gas shortages looming, now was not the time to jeopardise investment.
“Increasing royalty rates will have a flow on effect in the domestic gas market, at a time when that market is already under pressure due to declining production from Bass Strait and political barriers to resource development in southern states,” he said.
The increase is effective from 1 July and takes Queensland’s tax above Western Australia’s 10 per cent figure.
Queensland is now anticipated to take in approximately $2.5 billion from this source over the next four years.
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