Gas royalty revamp sparks calls for 10-year freeze

The Queensland Resources Council has repeated its call for the Palaszczuk Government to match Opposition commitments to a 10-year freeze on all resource royalties. It came as the State Government announced a new volume-based gas royalty regime, with rates locked in for five years. QRC chief executive Ian Macfarlane said the industry body welcomed the use of actual sales rather than an index for calculating gas royalties and the lower rates the new model offered for domestic production. But he said the QRC would have preferred the government to continue dialogue with the gas industry to better inform the development of the new petroleum royalty arrangements. He said also the industry noted the Palaszczuk Government’s commitment to a five-year freeze for new petroleum royalty arrangements, following its earlier commitment to freeze the rate and threshold for coal and metal royalties for three years. “The Government has recognised that stable royalties provide greater investment and employment certainty for the resources industry," he said. "The LNP promised 12 months ago, if elected, it would stabilise royalties for 10 years." Review identified need for change The new gas royalty regime follows a review, undertaken by a working group chaired by former South Australian Premier Jay Weatherill. Mr Weatherill concluded that the current royalty regime was not suitable for the existing configuration of the Queensland gas industry and recommended that a volume-based model be adopted. The volume-based model will see royalties calculated on the volume of gas produced and will include a sliding rate scale and producers’ sales revenue. Queensland Treasurer and Minister for Infrastructure and Planning Cameron Dick said that the new model would support affordable supply for domestic customers, appropriate returns for Queenslanders and fairness for gas producers. “This review has been crucial in ensuring that oil and gas companies are treated fairly, and that Queenslanders receive their fair share of royalties from this important industry," Mr Dick said. “The model is transparent, equitable, administratively simpler and locked in for five years. “Importantly, the new model supports the Palaszczuk Government’s commitment to create more jobs in more industries. “The royalty rates are also locked in for five years to provide certainty for producers.” The Queensland Petroleum Royalty Review report can be found here www.treasury.qld.gov.au/petroleum-royalty-review

Gas royalty revamp sparks calls for 10-year freeze

Industry Queensland

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