The Queensland government has reportedly offered Indian mining giant Adani a "secret deal" that would result in it paying just $2 million a year in royalties on its proposed Carmichael coalmine.
The ABC reports the so-called "royalties holiday" for the proposed $21 billion Galilee Basin facility would expire after seven years and could cost taxpayers $320 million in lost revenue.
Shadow treasurer Scott Emerson has slammed the plan, saying the government needs to explain why taxpayers' money is being used to benefit just one mining project.
"Labor said previously, heading into the election, they would never give taxpayer funds to one company," Mr Emerson said on Thursday.
"I think this is an extraordinary situation to see this government doing a secret deal behind closed doors to favour one company."
In the previous election campaign, Labor promised taxpayer money would not be used to pay for the rail link between the Carmichael mine and Abbott Point coal terminal.
Treasurer Curtis Pitt has rejected suggestions a special deal has been done with Adani.
"No taxpayer funds will be provided to Adani to support the construction of a rail line and Adani will pay every cent of royalties that is owed to the state," Mr Pitt said.
Progressive think tank The Australia Institute said a royalty holiday would simply wind up giving away Australian coal for nothing.
"Adani is being given the royal treatment and the Queensland taxpayer is on the hook for the bill," research director Rod Campbell said.
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