Queensland coal royalties hike raises almost four times more money than expected

Amid a stoush between the Palaszczuk government and the resources council, the state’s new coal royalties regime will generate much more money than was initially estimated.

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The Palaszczuk government’s contentious new coal royalties regime will generate four times as much money as it was initially meant to make this financial year in a massive boost to the state’s coffers.

Amid the escalating stoush between the government and Queensland Resources Council, Treasurer Cameron Dick will announce on Wednesday the new regime is now set to rake in $2.95bn in 2022-23.

The new projected revenue haul is a massive 286 per cent jump from the roughly $765m the Labor government had initially estimated it would make from its coal royalties hike over the financial year.

The government says the significantly revised projections are due to persistently high coal prices as well as weather disruptions in NSW that have limited supply and pushed up prices.

Treasurer Cameron Dick says the state’s coal royalties are “worth fighting for”. Picture: Liam Kidston

They have also credited a planned increase in coal fired power generation in several European countries for the uplift.

“This shows that coal royalties are worth fighting for, delivering a fair share for Queenslanders,” Mr Dick said of the new royalties projections, which will be unveiled in Wednesday’s mid-year budget update.

“We’ve secured a big win for Queensland by securing a share of the windfall profits made by coal companies.”

Across the forward estimates, coal royalties are now tipped to generate $21.54bn instead of the $16bn that was forecast in Mr Dick’s 2022-23 Budget.

And royalties from petroleum are now set to reach $5.84bn over the next four years – a significant $1bn increase from the government’s previous forecast in June.

The estimated uplift from the royalties hike is expected to drop significantly from the $2.95bn forecast this financial year to $170m next financial year and $141m the year after that.

The Queensland Resources Council launched a massive advertising campaign this month taking aim at the new coal royalty tiers – warning of its impact on regional jobs security and future investment.

The state government will reap almost $3 billion in royalties from the new tax this financial year Picture: Cameron Laird

This prompted a strong rebuke from an “angry” Premier Annastacia Palaszczuk, who boycotted the QRC’s annual lunch and ordered her ministers to do the same.

Mr Dick maintained that regional Queensland hospitals would still be the beneficiaries of the initial $1.2bn the government had anticipated it would make from the coal royalties hike.

Another $100m from royalties will go towards establishing a Queensland Critical Minerals Investment Fund, while $150m will be used to “support” workers at publicly-owned coal-fired power stations.

“We’ll also put aside $3bn in a long-term asset held by the Consolidated Fund, dedicated to future infrastructure in regional Queensland,” the Treasurer said.

Japan’s Ambassador to Australia, Shingo Yamagami, has been one of the harshest critics of the new royalties regime – previously warning that it carries “so much potential risk”.

QRC chief executive Ian MacFarlane has also repeatedly warned more resource companies would move their investment focus away from Queensland.

Originally published as Queensland coal royalties hike raises almost four times more money than expected