Scattered Australian Cash
Scattered Australian Cash

Gas tax hike flows on to consumers

A BUDGET decision to claw in an extra $476 million in gas taxes will cost consumers big, the Queensland Resources Council says.

And the pain will be spread wide, with the cost to be passed directly to customers.

QRC chief executive Ian Macfarlane said the mining industry body had modelled the levy rising from 10 to 12.5 per cent on July 1 to calculate the costly hit to business and customers.

"When you put up taxes someone has to pay, and in this case unfortunately that means that domestic gas users will have to reach further into their pockets," Mr Macfarlane said.

QRC chief Ian Macfarlane (AAP image, John Gass)
QRC chief Ian Macfarlane (AAP image, John Gass)

"Domestic industry and manufacturers have been struggling under the weight of higher gas bills, which can run into the millions of dollars already.

"An extra tax hit of more than $13 million a year will make Queensland manufacturers less competitive and it will have a bigger flow-on effect for other Australian businesses that rely on Queensland gas."

The hit will be felt particularly hard by industry, who use about 70 per cent of the domestic gas market, particularly manufacturing.

Electricity generation accounts for 20 per cent, and households use about 10 per cent.

A coal seam gas production well along the Warrego Highway west of Goombi-Fairmeadow Road Chinchilla, Queensland. (David Martinelli)
A coal seam gas production well along the Warrego Highway west of Goombi-Fairmeadow Road Chinchilla, Queensland. (David Martinelli)

Treasurer Jackie Trad has defended the hike - which will earn taxpayers an extra $476 million in four years - in the face of sustained anger from the industry, who have called it a shock and counter-productive move.

She's pointed to massive growth in the gas sector, supported by the Queensland Government and a 10 per cent royalty rate over the past decade and said now was the time for the sector to "pay a bit more back to the people of Queensland".

 

Treasurer Jackie Trad has defended her Budget’s increase to the petroleum royalty rate, arguing the extra money will pay for schools, roads and hospitals. (AAP Image/Dave Hunt)
Treasurer Jackie Trad has defended her Budget’s increase to the petroleum royalty rate, arguing the extra money will pay for schools, roads and hospitals. (AAP Image/Dave Hunt)

But Mr Macfarlane said the move would lead to "self-inflicted economic damage".

"QRC has urged the Queensland Government to exclude domestic gas from the royalty tax increase and to delay the introduction of any gas royalty increase until January 1 2020 to address confusion about the legislation," he said.

"Queensland's reputation as a safe place to invest depends upon stable and transparent laws and regulations and a commitment to open and good faith consultation."

Queensland's oil and gas industry supports more than 39,000 full time jobs, both directly and in supporting industries, he said.


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