Federal Budget 2023: Resources sector drives first budget surplus in 15 years

  • Posted 09 May, 2023
  • Media Releases

9 May 2023

Record tax revenue from the resources sector has enabled the Federal Government to deliver its first budget surplus in 15 years.

The Queensland Resources Council (QRC) said it was clear that strong demand and high prices for resources, particularly Queensland’s coal and gas, has made a major contribution to the improvement in the Government’s bottom line.

QRC Chief Executive Ian Macfarlane said when resources are strong, the economy is strong and every Australian benefits.

“Tonight’s Budget has confirmed an estimated $41 billion improvement on Treasury forecasts from just over six months ago,” he said.

“Tax revenue from resources exports will contribute 20 per cent – or $8 billion – of the extra $41 billion now expected next financial year, which has proved the difference in the Government being able to deliver a $4 billion budget surplus.”

Mr Macfarlane said the strong long-term outlook for the resources sector is the shining light for the national economy as Australia faces economic headwinds at home and internationally.

“The resources sector is proud of its significant contribution to Australia’s economic security and the QRC urges Governments to focus on policies that encourage the essential private investment required to develop projects that benefit all Australians,” Mr Macfarlane said.

“In Queensland, coal, gas and minerals producers contributed a record $94.6 billion to the state’s economy in the 2021/22 financial year and the latest estimates indicate this figure will be exceeded this year.

“This contribution includes over $27 billion being spent purchasing goods and services from local businesses, particularly in regional Queensland.

“The Queensland resources sector is also helping with cost-of-living pressures for more than 450 thousand Queenslanders whose jobs are supported by the resources sector, including 61 thousand directly employed in an industry with the highest average income in Australia.”

The QRC said while the assistance being provided to some homeowners and businesses with rising energy costs will be welcomed, the Government needs to focus on long-term solutions by increasing supply.

“Queensland’s onshore gas producers are playing a crucial role in guaranteeing Australia’s energy supply in the transition to a decarbonised future, but the current unprecedented Federal Government intervention in the market has created serious uncertainty among international investors,” Mr Macfarlane said.

The QRC welcomes the Government’s investment of $57.1 million to develop critical minerals international partnerships and $23.4 million for critical minerals policy development and project facilitation.

This new investment builds on the $2 billion Critical Minerals Facility and $1 billion targeted to value adding in resources, under the National Reconstruction Fund.

Other budget initiatives welcomed by the QRC include:

• the $400 million Industrial Transformation Stream to support the growth of new clean energy industries in regional areas, as well as innovative efforts to decarbonise existing industrial activities.
• the $600 million Safeguard Transformation Stream of the Powering the Regions Fund will support trade exposed facilities covered by the Safeguard Mechanism to reduce their on site emissions and boost their global competitiveness.
• $14.3 million to partner with the Queensland Government, supporting research and development into reducing emissions in Australia’s energy resources sector.

“This budget underlines the importance of keeping the resources sector strong,” Mr Macfarlane said.

“It is more important than ever that there is policy consistency and stability at both the State and Federal level to give investors the confidence to go ahead with new projects and jobs.

“Communities across Queensland and Australia rely on a strong resources sector. The QRC looks forward to working with the Federal and State Governments on the best policies to support investment and jobs.”