Key measures impacting the resources and renewables industry
The 2019-20 Queensland State Budget was tabled in State Parliament yesterday, Tuesday 11 June 2019. The Budget provides an overview of the State economy, outlines the Government's revenue and expenses for the coming year and details the priorities the Government will deliver.
When it comes to the Resources and Renewables industry, the following headline measures are likely to have a direct or indirect effect:
- Petroleum royalty rate increase: the Government is increasing the petroleum royalty rate by 2.5% to 12.5% from 2019-20. A transitional arrangement will apply for one year for royalty payers that lodge and pay on an annual basis ending 31 December 2019. This increase is projected to increase revenue by $476 million over four years ending 2022-23. The Government will also review the design of Queensland's current petroleum royalty regime. There is a suggestion that the review may look at a concession rate for domestic gas supplies.
- Financial Assurance and Rehabilitation: the Government is providing increased funding of $1 million over three years to deliver enhancements to the financial assurance and land rehabilitation regulatory framework.
- Native Title: the Government is providing additional funding of $2.4 million over two years to support the Native Title Compensation Project Management Office to manage existing compensation claims made against the State and develop a Native Title Compensation Settlement Framework.
- Coal Mine Workers Health Scheme: the Government is providing increased funding of $6.7 million over two years to embed reforms to the Coal Mine Workers' Health Scheme and other reforms to address resource worker health issues following the re-identification of Coal Workers' Pneumoconiosis in Queensland's mining sector.
- Resources Health and Safety: the Government is providing additional funding of $4.9 million over two years to establish an independent regulator for worker safety and health in Queensland's resources industries, increase hygiene inspection and audit activities and establish mobile health units.
- Mount Isa below rail subsidy: the Government will introduce a $20 million per annum Transport Services Contract payment for this freight line. This payment will be to reduce below rail access costs for users and further promote rail for freight, as well as support continued development of the North West Minerals Province.
- Port of Townsville:
- the Government is providing additional funding of $59.8 million for the Port of Townsville to undertake the Townsville Channel Capacity Upgrade Project.
- subject to the finalisation of a business case and shareholding Minister consideration, the Government will provide additional funding of $30 million to contribute towards the construction and operation of containerised freight loading and unloading facilities at the Port of Townsville.
- Resource Recovery Industries Roadmap: the Government is providing additional funding of $1 million over two years for the Resource Recovery Industries Roadmap and Action Plan to position Queensland as a leader in resource recovery by promoting growth and sustainability of the waste, resource recovery and recycling industries.
- Hopeland (Linc Energy): the Government is providing increased funding of $8.9 million over two years to support environmental monitoring of land impacted by underground coal gasification by-products.
- Government investment in renewable energy: the revenue measures proposed in the Budget (including the increased petroleum royalty rate) will fund the Governments investment in renewable energy. The Government has committed total funding of $280 million over three years ($30 million new funding and $250 million internal funding) for Government investment in renewable energy generation through CleanCo Queensland Limited. The internal funding of $250 million is for CleanCo Queensland Limited to build, own and operate new commercial renewable energy generation in Queensland. This funding will be provided to CleanCo as projects are approved.
- Queensland Hydrogen Industry Strategy: the Government is providing additional funding of $19 million (including $15 million for an Industry Development Fund) over four years to establish an agenda for renewable hydrogen industry attraction and to incentivise job creation, regional growth, and increased innovation and development. Gladstone will be a focus point for hydrogen development.
Other key revenue measures
Revenue measures: other revenue measures were set out in the State Budget, including an increase in the land tax surcharge for absentees as well as companies and trusts as well as a package of targeted payroll tax measures which will include a higher payroll tax exemption threshold and reduced payroll tax rates for regional employers. See our article on all the Revenue Measures of the Qld State Budget here ( http://www.mccullough.com.au/2019/06/12/queensland-budget-2019-state-tax-changes-what-is-in-it-for-you/).
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