How the resources industry keeps Queensland ticking over
With the recent budget update in Queensland and large projects such as Adani’s Carmichael Coal mine poised to start, it’s timely to take stock of the importance of the resources industry to the state.
According to Queensland Resources Council (QRC) industry data, gathered from its full-member companies (those who are in production), one in every eight jobs and one in every $5 spent in Queensland is directly related to the mining and resources industry. The QRC estimates the industry supports some 14,200 businesses and direct expenditure data indicates the contribution of mining and resources companies to the Queensland economy in 2017/2018 was some $29.1 billion.
- $5.2 billion in salaries and wages to approximately 35,649 full-time resident employees;
- $19.5 billion in purchases of goods and services from almost 14,300 local businesses, community contributions and payments to local governments; and
- $4.4 billion in state government payments – including royalties, stamp duty, payroll tax and land tax.
The largest contributor to the total direct expenditure in the Queensland minerals and energy sector in 2017/108, was coal mining with approximately $19.9 billion, or 68.3 per cent of the total spend.
Putting it in perspective
In this economy, where jobs and job security are becoming scarce commodities themselves, the mining industry in Queensland is creating one job every 40 minutes. That means that among other industries shrinking because of the constant introduction of newer and more efficient technologies and work practices, the mining industry instead shows growth and opportunity.
It’s also useful to keep in mind what the outputs of the mining industry contribute to … for example an iPhone contains aluminium, cobalt, graphite, lithium, gold, silver, copper, tungsten and silicon, nickel, iron, tin and potassium. Electric and hybrid vehicles and their batteries contain (among other things) lithium, cobalt, nickel, graphite and copper. Computers, transport and communications all rely on products from the mining industry.
The Minerals Council of Australia stated that higher mining profits have contributed to a $3.4 billion increase in projected corporate tax receipts in 2018-19. Without mining, the budget would not return to surplus, tax cuts would remain a distant mirage and services and infrastructure would suffer.
In Queensland, the record returns from the resources industry to the Queensland budget show the importance of continued exploration and investment in new projects to keep the budget in the black.
Queensland Resources Council Chief Executive Ian Macfarlane has welcomed Treasurer Jackie Trad’s budget update, showing record returns from coal royalty taxes.
“Queensland’s black coal is putting the Queensland budget in the black,” Mr Macfarlane said.
“Resources investment keeps Queensland’s economy firing on all cylinders and keeps the budget out of the red.
“Without resources royalty taxes, in particular from black coal, the budget surplus of $524 million would be a budget deficit of $4.6 billion.”
Returns from coal royalty taxes are now at a new record of $4.26 billion, up more than $700 million on the $3.52 billion forecast in the budget. For the period to 2020-21, coal royalty taxes have been revised up by $1.8 billion.
Overall, Queenslanders will receive another record of $5.12 billion in royalty taxes from the entire resources sector in this financial year.
Peta Baldwin is Cannings Purple’s State Director in Queensland and an expert in investor relations and the resources industry, who has worked in in-house roles at Mount Isa Mines, Alcoa and most recently AngloGold Ashanti. Contact Peta