Publications / Resources
The Queensland State Government (Government) has announced that from 1 July 2011 royalties payable to the State on the production of petroleum, gold and other minerals will be collected by the Office of State Revenue (OSR).
Royalties in Queensland have historically been collected by the Mines and Energy division of the Department of Employment, Economic Development and Innovation which also has responsibility for the regulation of the mining industry in Queensland.
The Government has also proposed that royalties become payable on a monthly basis rather than on a quarterly basis (or even annually for smaller producers) as is the current practise.
The Government has indicated it intends to consult the resources industry in relation to implementing the changes, which are aimed at streamlining the collection system.
The changes are also likely to be aimed at improving the cashflow impact of royalty payments for the Government which has suffered from continued strength of the Australian dollar and the significant drop in production from the Queensland resource industry due to the natural disasters which have hampered the sector so far in 2011. The impact on cash flows is likely to be significant given that the State collected over $2 billion in royalties from producers in the year ended 30 June 2010.
Unfortunately the changes to the payments system are likely to only further increase the administrative burden on producers. Combined with the likelihood of the introduction of the Mineral Resources Rent Tax (or its equivalent) by the Australia Federal Government at some point in the future, producers are faced with the prospect of calculating royalties payable under both State and Federal legislation.
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