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Sneak attack: Japan may be right about coal but is dead wrong to enter Qld political debate

The Japanese Government has made the extraordinary step of publicly interfering in Queensland’s political debate about coal royalties.

Jul 07, 2022, updated Jul 07, 2022
Yamagami Shingo has made an extraordinary attack on Queensland's coal royalties during a speech at University of Queensland.(Perth USAsia Centre: Kelly Pilgrim-Byrne/ABC)

Yamagami Shingo has made an extraordinary attack on Queensland's coal royalties during a speech at University of Queensland.(Perth USAsia Centre: Kelly Pilgrim-Byrne/ABC)

Japan’s Ambassador Shingo Yamagumi used an otherwise low-profile speech at the University of Queensland to attack the State Government over its coal royalty hike, which has the potential to rake in billions of dollars for the State Government if prices remain high.

Yamagumi said the increase threatened the trust built up over the years and had meant the international community would rethink its belief that Queensland was a safe and predictable place to invest and the fallout could extend to investment other than coal.

The comments were extraordinary in that they were in the public arena and obviously fed to the national media to make the biggest splash possible. Importantly, that feeding to the national media may have been by another party.

What the comments also highlighted was the poor handling of the issue by the State Government. Its response now was that royalty hikes have happened before and Japan was still doing business here.

While Yamagumi invoked trust as an issue he just made sure that any trust that was left was thrown out the window.

Japan also has history here. In 2018, Japan’s consul general wrote to the State Government claiming Queensland’s reliability as a coal producer was threatened by a Queensland Competition Authority ruling related to the costs imposed on rail haulage of coal. It also said Japan’s steel mills may be forced to look elsewhere for their coal.

The difference then was that the complaints were not public.

In this latest foray, Yamagumi said the royalty hike was “a huge shock for Japanese companies”.

“The future of the successful partnership between Japanese businesses and Queensland, as a competitive investment destination could be at great risk.”

However, Japan’s major players in coal, Idemitsu, Mitsui and Mitsubishi have all been been subject to speculation that they were selling Queensland coal well before the royalty brawl erupted.

This is hugely embarrassing for the Queensland Government. Foreign governments, especially vital allies like Japan, don’t get publicly involved in domestic political issues. Representations are often made but to go public is a significant step for Japan.

Japan is a trusted ally and a welcome investor in Australia and Yamagumi may be correct, but he has no right to make public comments on Australian political issues.

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What his comments do underscore is the Palaszczuk Government’s approach and its inability to deal with the mining industry.

Since the Adani debacle, the Government has had a strained and difficult relationship not helped by then deputy premier Jackie Trad’s demands that the industry add $70 million to a regional infrastructure fund and a royalty hike on gas in 2019.

The industry is not letting go of the issue and is likely to keep up its attacks on the Government and its lack of consultation on the issue. The industry complained then about a lack of consultation, but it went nowhere.

For its part the Government is maintaining its right to impose royalties on a product that was making billions for coal companies. It has started its own campaign which was attacked by the Queensland Resources Council chief executive Ian Macfarlane.

“It’s a huge insult to the companies operating and investing in Queensland to now hear the State Government talking down our contribution in an attempt to justify hitting us with the world’s highest coal royalty tax,” Macfarlane said

In response to Yamagumi, the State Government said Queensland had a mutually respectful relationship with Japanese coal companies that stretched back more than half a century.

“That relationship has withstood previous increases to coal royalties in 1994, 2001, 2008 and 2012,” he said.

“Queensland is committed to continuing to work closely with Japanese business partners across existing and new industries into the future, a message that the Deputy Premier (Stephen Miles) reinforced when he met with Government officials and steelmakers on his recent trip to Japan.”

 

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