Mining industry bodies have criticised the Queensland government's decision to hike coal royalty rates, labelling the move as "short-sighted" and "misguided". 

Treasurer Cameron Dick announced what he labelled a progressive new royalty scheme in the state budget on Tuesday.

But Minerals Council of Australia chief executive officer Tania Constable said she believed the move could place jobs at risk.

"This tax grab is short-sighted and counterproductive over the long term and has the potential to scare off investors in all commodities," she said.

The new scheme would see three new tiers added to the royalty system, which is currently capped at 15 per cent for prices above $150 per tonne.

From next month, new tiers would apply of 20 per cent for prices above $175 per tonne, 30 per cent for prices above $225 per tonne, and 40 per cent for prices above $300 per tonne.

Mr Dick said each new tier applied only on the margin, meaning if the coal price was $302 per tonne, the 40 per cent rate would only apply to that last $2.

"With coal recently trading at over AUD$500 per tonne, our current rate structure is clearly no longer fit for purpose," he said.

"We know the foreign shareholders of coal companies won't like these changes, but they can rest easy.

"We are not increasing the rates that apply at the existing tiers."

He said the new regime was forecast to deliver an additional $1.2 billion in royalties over the forward estimates.

"All of that $1.2 billion, and more, will be going into regional Queensland," Mr Dick said.

'Misguided' policy

But Queensland Resources Council chief executive Ian Macfarlane said the policy was "misguided" and would make the state less internationally competitive.

"What the government also isn't telling people is that because of the GST equalisation process, 80 per cent of the extra royalties raised will be redirected to Canberra over the next five years anyway," he said.

"So the net economic benefit for Queensland will be minimal but the potential damage to our industry, and the Queensland economy, could be major."

He said the resources sector contributed a record $84.3 billion to the state's economy last financial year, including through spending, and supported more than 422,000 jobs.

New tax labelled 'inconceivable'

Anglo American operate several mines across central Queensland, including the Moranbah North and Grosvenor mines.

The company's Australian CEO Nick Barlow said the changes meant it would now contribute 60 per cent of its profits to governments through state and federal taxes.

"Queensland's coal royalty rates were already among the highest in the world," he said.

"This new tax is inconceivable, and it will place a heavy burden on our sector and Queensland mining regions."

He said the new tiers would hurt business cases for any new investment.

"Significant capital investment is required to sustain mining operations, including in constructing and preparing mining areas, mining equipment and infrastructure," Mr Barlow said.

"In a highly cyclical business, we need higher price periods to make these investments, which not only create jobs and support our regions, but also benefits the Queensland economy.

Capitalising on assets

Professor John Quiggin from the University of Queensland's School of Economics said the government's policy was a "good way of capitalising on current high coal prices, which are unlikely to be sustained".

"Raising these rates is not going to lead anyone to close down," he said.

"If the price is $300 a tonne, paying $120 in royalties isn't going to put you out of business.

"You won't see these [high] prices indefinitely.

Professor Quiggin said he believed, regardless of the new tiers, there was not going to be significant new investment in coal.

"That's one of the reasons why prices have gone so high, because no one is willing to invest a lot in getting access to new coal resources," he said.

Buyers could look elsewhere

Kylie Porter from the Greater Whitsunday Alliance, the economic development agency for the Mackay, Isaac and Whitsunday regions, said the government's move could impact coal sales.

"We have to be realistic about the fact that buyers of our region's coal may start to look at other markets because the price will be up there, and very expensive," she said.

She said Queensland coal was some of the "most efficient" and this move could "force buyers away from our market and to use a lower quality coal".

"They are conversations that we need to actually have and find some balance in the argument around it," Ms Porter said.

"What we actually need to make sure is that our regions, through the current buoyant coal pricing period, are supported while we start to look for new replacement sectors that can help support our community transform for the future."

Communities want returns

Anne Baker is Mayor at the Isaac Regional Council, an area that takes up a large proportion of the Bowen Basin and is home to many coal mines.

"What we know, in the Isaac region, is that our region contributed 53 per cent of Queensland's coal royalties and we're the largest resource region in the state," Cr Baker said.

"So what we are wanting to see is an appropriate reinvestment of the royalties back into our region, funding that supports health, education, childcare, aged care, affordable housing.

"That's our role to advocate and to work towards, to bring that attention to the conversation."

The budget also included funding for projects like a new hospital for Moranbah, something Cr Baker welcomed.

Central Highlands Development Corporation CEO Peter Dowling said he was still digesting what it meant for the local industry, but he hoped to see further investment.

He said the region "punched well above its weight" in terms of economic output.

"The challenge we face in inland regions like the Central Highlands is the investment into our regions for all of those essential living requirements that we have," Mr Dowling said.