Queensland is riding on the resources sector
WHILE the mining and resources sector has pulled back from the record-setting activity peaks of earlier this year, it remains one of the key foundations of the Queensland economy.
Data released this week by the Queensland Resources Council shows one in every four dollars of the state's economy and one in every five jobs is tied to the mining and resources sector.
State-wide spending data for 2011-12 confirms that despite testing market conditions, the minerals and energy sector has again increased its economic contribution to the state.
The data demonstrates that on the back of higher capital expenditures, resource companies created $36 billion in gross regional product over the 12-month period, a mammoth 40% increase on the 2010-11 period.
QRC chief executive Michael Roche said that by using postcode-aggregated spending data supplied by its largest member companies, the minerals and energy sector is calculated to have spent $28 billion directly on goods and services from Queensland suppliers and $8 billion in wages to 64,300 direct workers who reside in Queensland.
"On top of that direct spending, the sector, via its high capital intensity and linkages with sectors such as transport, construction and manufacturing, supported and created another 416,000 jobs in those other sectors," Mr Roche said.
"Queensland resource companies also paid $3.2 billion in royalties to the Queensland Government and about $11 billion in taxes to the Federal Government in 2011-12.
"This economic contribution by the resources sector is an extraordinary outcome for Queenslanders when you consider the sector's physical footprint covers just 0.09 percent of the state's land mass.
"Importantly, what the results show is that resource company spending spreads across Queensland, with barely a postcode not experiencing the benefits of economic stimulus from the sector."
Mr Roche said that, as we have seen with the current downturn in coal markets, there is tremendous benefit to Queenslanders of producing a diversity of resource commodities as a hedge against increasingly volatile global market conditions.
"The challenge now is to ensure that there is a strong pipeline of projects across all commodities to sustain and grow the resources sector in Queensland," Mr Roche said.
"Achieving that strong pipeline of new projects will require a clear focus on addressing cost disadvantages such as workforce inflexibility, ballooning tax and royalty imposts and regulatory green tape and red tape."
Details of the report - compiled by QRC and Lawrence Consulting - including reports at the Queensland Statistical Division and Local Government Area level can be found at queenslandeconomy.com.au.