Image: Reuters Berita 24 English - According to Japan's ambassador to Australia, Japanese businesses may be hesitant to invest in Queens...
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| Image: Reuters |
Berita 24 English - According to Japan's ambassador to Australia, Japanese businesses may be hesitant to invest in Queensland, one of the world's largest coal-producing states, after the state stunned miners by sharply raising coal royalty rates in order to take advantage of windfall profits.
Shingo Yamagami expressed "grave concern" about Queensland's royalty increase announced in June, a decision made without consulting the mining industry after a 10-year moratorium, in unusually strong terms.
In a speech delivered on Wednesday at the University of Queensland, Yamagami stated, "Make no mistake, this is a major shock for Japanese companies."
The highest rate, which was set at 40% for coal over $300 per tonne, was significantly higher than royalty rates in other countries.
The envoy warned that "the future of the prosperous alliance between Japanese enterprises and Queensland, as a competitive investment destination, could be greatly at danger."
He said that in order to make new investments in minerals, hydrogen, and renewable energy sources, Japanese companies Mitsui & Co Ltd, Mitsubishi Corp, and Idemitsu Kosan Co Ltd would need to have mutual trust with the state government. These companies all have significant coal investments in Queensland.
According to Yamagami, several Japanese businesses are already debating whether Queensland will remain the dependable and secure location for investments that it has been for decades.
According to a Queensland government official, the state was committed to continuing its decades-long tradition of working closely with Japanese partners in both established and emerging industries. The deputy premier of the state also underlined this commitment during a recent visit to Japan.
According to government officials, "the association has withstood prior hikes to coal royalties in 1995, 2001, 2008, and 2012."
The ambassador's remarks, according to analysts, were unusually direct for a Japanese diplomat but they did reflect investors' demand for budgetary stability.
According to Credit Suisse analyst Saul Kavonic, "It was an extremely strong response from that stakeholder, but it is typical of the significant lack of planning and engagement with the business ahead of the tax change announcement."
Following that declaration, there has been a sharp rise in inquiries from investors throughout the world concerning Australia's tax stability, he claimed.
