‘Backfired badly’: Call to reverse Qld coal royalty hike before billions more lost

Queensland’s highest-in-the-world coal royalty tiers should be axed before they cause billions more dollars in revenue to be lost and put frontline services at risk, the state has been warned.

Queensland’s highest-in-the-world coal royalty tiers should be axed before they cost the state billions more dollars in lost revenue and put frontline services at risk, Coal Australia warns.

The state stands to lose $5bn in Commonwealth GST revenue from 2025-26 to 2027-28 due to the significant $8.8bn windfall received in extra royalties since 2021.

Cameron Dick implemented the higher royalty scheme when he was state treasurer. Picture: Richard Walker

The higher royalty scheme was implemented in response to sky-high coal prices by Labor Treasurer Cameron Dick, who had argued the state’s economy should immediately benefit from the boon.

Billions of dollars in additional revenue was used to fund the state’s infrastructure program and deliver a $1000 energy rebate, which cost the budget $2.5bn.

Coal Australia chief executive officer Stuart Bocking said the former government’s royalty hike “backfired badly” and called on the state to now reverse it.

“Queensland’s coal mining communities are carrying the world’s highest and least competitive royalty rates while also propping up a broken GST system that rewards financial recklessness,” he said.

“Now is the time to right that wrong and ensure that Queensland gets its fair share of GST

funding by restoring a fairer, more modest royalties take on coal.”

Stuart Bocking, chief executive of Coal Australia.

Mr Bocking said the independent Commonwealth Grants Commission’s determination would dock Queensland and prop up the poorly managed Victorian economy.

“The new Crisafulli government should not allow a single Queensland mining job to be put at risk to reward a Victorian government that has spent years squandering taxpayers’ money,” he said.

Premier David Crisafulli said the government would stick to its election promise and not tinker with coal royalties.

“We’ve got a separate battle when it comes to GST funding and we certainly weren’t pleased with the news on Friday that somehow Melbourne and Sydney are going to be rewarded for some pretty ordinary behaviour over the last few years and that’s going to come at the detriment of Queensland, so we’re not overly pleased about that,” he said.

Treasurer Jim Chalmers said he would not capitulate to Queensland’s demand to reject the commission’s recommendation.

Federal Treasurer Jim Chalmers said the federal government shouldn’t be to blame for pressures on the Qld budget. Picture: NewsWire / Martin Ollman

“The Commonwealth Grants Commission process is an independent process that takes place at arm’s length from the Commonwealth government of the day,” he said.

“Queensland was clearly expecting a reduction, they had booked part of this downgrade in their mid-year update and they explicitly said at the time that there were further downside risks.

“It’s not unprecedented for state treasurers to try and blame Commonwealth treasuries for pressures on their own budgets.”

When asked whether he would take the blame should the Queensland Government cut infrastructure and frontline service funding following a GST reduction, Mr Chalmers said the federal government shouldn’t be to blame.

“The state government shouldn’t be blaming the Commonwealth Government for pressures on their budget. We’ve all got pressures on our budget,” he said.

“This is not a decision taken by the feds. This is a decision taken by an independent arm’s length Commonwealth Grants Commission.

“Not forgetting as well, that $8.8bn in extra royalties. So nothing that the Commonwealth Government is deciding is putting extra pressure on the Queensland budget.