The Hunter's future depends on the region's ability to attract the investment needed to develop a range of industries in coming decades.
During his recent Hunter visit, Federal Energy Minister Chris Bowen reaffirmed the need for the new gas-fired plant at Kurri Kurri to be converted to green hydrogen by 2030, requiring billions of dollars in investment. Other major projects are also seeking similar large-scale investment, including the Kurri Kurri battery project, the Hunter Hydrogen Network, the Hunter coast offshore wind project and the Newcastle Port container terminal.
These projects all compete for global investment dollars against other proposals across the state, across the country, and globally. In that context, a positive reputation as an investment destination is critical, and sudden changes to regulation or taxation can be very damaging.
Recently, some have called for NSW to adopt Queensland's recent dramatic increase in mining royalties. Such calls are shortsighted, and potentially very damaging to the Hunter economy. Imposing a Queensland-style royalty increase in NSW would likely only deliver a short-term revenue gain, while inflicting great damage to the reputation of NSW and the Hunter as a place to invest. This would have flow-on impacts across the economy. The impact of the shock Queensland royalty hike is already being felt.
Major Japanese companies like Mitsubishi and Mitsui are big investors in Australia. Their investment over decades has helped build roads, rail lines, airports and other infrastructure, and created tens of thousands of jobs. But in a recent speech, the Japanese Ambassador warned that Japanese companies are now questioning whether Queensland will continue to be a safe place to invest, not just in mining, but in infrastructure, hydrogen, and other cutting-edge technologies too.
Global investment banks, including JPMorgan and the Royal Bank of Canada, have also raised concerns about future investments in Queensland.
NSW already has a royalty system that delivers benefits from high coal prices. Recent high coal prices have seen royalty revenues more than double over the last two years. This has been achieved without damaging the investment reputation of NSW. Recklessly raising mining royalties would send a terrible message that NSW is a risky place for investment. This would damage efforts to strengthen and diversify the Hunter economy. We need to attract future investment to the Hunter. Sudden, sharp tax increases are a sure-fire way to scare off investment.
