Economist suggests digging deeper into miners’ pockets

A QUT economist has suggested the Queensland Government dig deeper into miners' pockets to raise revenue.

Dr David Willis, from the Queensland University of Technology, is pushing for an overhaul to the way the government collects resources royalties.

"Queensland and the other states need to look at royalties based on an average tonnage shipped as well as royalties per price, with the miners paying whichever is higher at the time," he said.

"Therefore, whatever miners produce past a certain price point, they pay for based on tonnage."

But Queensland Resources Council chief Michael Roche warned the state was already seen as a "high cost jurisdiction".

He said Dr Willis's proposal would damage Queensland's attractiveness to investors.

As the time nears for the government to hand down its budget, Dr Willis said there were limited options for changing the royalties system.

"Currently the royalties system is based on the price of a tonne of coal or iron ore," he said.

"But this is clearly deficient given the miners' strategy of overproducing and oversupplying the market to force prices down to artificially low levels.

"Larger miners with larger shares of the coal, gas and iron ore markets employ this strategy to try to maximise production and market share and at the same time pay less in royalties.

"We are presently running record production numbers but getting record low prices."

Mr Roche argued miners were attempting to maximise production to save money through spreading fixed costs across as many tonnes as possible.

He said the Palaszczuk Government had promised no royalty surprises and with the new LNG export industry starting to generate income, now would be the worst time to adjust royalties. - APN NEWSDESK