QRC CEO Ian Macfarlane
PERTH (miningweekly.com) – Resources companies in Queensland reportedly spent A$27.7-billion on local goods and services in 2020/21, a new report from the Queensland Resources Council (QRC) has shown.
Spending in the year under review was up by 4%, or A$1-billion, on the previous period.
Indirectly, the resources sector is estimated to have stimulated an additional A$45.6-billion of spend in the Queensland economy in 2020/21, indirectly supporting 366 332 jobs.
QRC CEO Ian Macfarlane said the Local Content report was an important measure of the commitment of member companies to supporting local businesses and supply chains in the regions in which they operate across Queensland.
“The $27.7-billion spent locally in 2020/21 means resources companies operating in Queensland are now spending a record 82% of their total procurement budgets in this state, which is a great outcome,” Macfarlane said.
“This means the benefits flow through to everyone, from the companies providing and servicing the big mining machinery to the local food store providing catering for functions and conferences that a resources company might host.”
Some 16%, or $5.6-billion, of total expenditure was spent interstate or in New Zealand, with a further 2%, or A$0.5-billion, spent with international vendors.
Since 2009/10, the Queensland resources sector purchased A$287-billion in goods and services from suppliers in Queensland.
Macfarlane said while taxes and royalties from resources companies help governments pay for hospitals, schools and essential services, the report shows how important the sector is to supporting local jobs and economies, particularly in regional areas.
“Nearly half the total spend on goods and services by our sector was spent outside the Greater Brisbane area and provides tremendous flow-on benefits in those communities,” he said.
“It has also been very encouraging to see Queensland businesses stepping up to overcome many of the supply chain issues caused by the Covid pandemic to meet the growing demands of resources companies.
“This has enabled our sector to continue operating at full production, which has kept the Queensland economy strong during the fall-out of the global pandemic.”
Macfarlane said the total economic benefit to Queensland in 2020/21 from the resources and energy sector was a phenomenal $84.3-billion. It supported one in every six jobs and one of every five dollars spent in Queensland can be linked to resources companies.
He said it was great to see nearly half of Queensland resources and energy companies plan to increase their spending on local goods and services over the next 12 months, delivering even greater benefits to the state economy.
The report shows Queensland’s coal sector accounted for 70% of the total spend on goods and services in the Sunshine State in 2021/22, metals came in at 16%, gas 11% and 3% from other resource activity.
Macfarlane said the report clearly demonstrates why the Queensland government needs to reconsider its controversial coal royalty tax hike, which has thrown the resources sector’s future into jeopardy.
“If we want the resources sector to continue to underpin the state’s economic recovery and deliver jobs in the long-term, the industry needs to continue to attract global investors,” he said.
“Unfortunately, we’re already seeing countries like Japan and a company as big as BHP indicate the coal royalty hike threatens their future plans for Queensland, which is just the tip of the iceberg for what’s coming if the government continues to impose these excessive new coal royalty taxes on producers.”