High coal royalties, low returns: threat to jobs and services

This crisis should spark a wider rethink. An independent inquiry could benchmark Queensland’s entire mining industry against competitors worldwide. How do our royalties compare? What about approval times and regulation? Are there infrastructure issues to attack? What about energy prices?

The inquiry should also examine geostrategic threats. China has already manipulated the nickel market, flooding supply out of Indonesia forcing BHP to mothball its WA nickel operations. It is targeting iron ore next. Does anyone seriously think coal won’t be in its sights? If we want to keep our resource industries resilient, we need to plan ahead.

There’s another consideration. Under the Commonwealth Grants Commission, any extra money Queensland raises from royalties is redistributed to other states - especially Victoria, the worst-run state in the country, which refuses to develop its own mineral wealth. So when royalty income rises, much of the money doesn’t stay here. That needs to stop.

Handled properly, this crisis could become an opportunity. By opening up the royalty debate, Queensland can shine a light on the risks and opportunities in the whole mining sector. We can solve our state-level problems and push the Commonwealth to fix theirs.

And at the end of the process, not only would we have a royalty system that actually works, but Queenslanders would have a clearer sense of the industry that still pays the bills to put food on their plates.