Queensland Treasurer Cameron Dick attacks ‘unfair’ NSW proposal on coal royalty revenue

Queensland Labor Treasurer Cameron Dick says a NSW proposal on royalty revenue as ‘unfair’ and argues the changes would cost his state $500m a year.

Premier Steven Miles and Treasurer Cameron Dick make a pre-budget announcement in Griffin on Sunday. Picture: Steve Pohlner

Queensland Labor Treasurer Cameron Dick is railing against a push by NSW to overhaul the way coal royalty revenue is calculated in the GST carve-up, saying the proposal was “unfair” and would cost his state $500m a year.

Mr Dick, who will deliver his fifth state budget on Tuesday, said he was prepared to “fight” the independent Commonwealth Grants Commission and the NSW Labor government over the proposed changes.

Queensland’s pre-election budget will give billions of dollars in cost-of-living handouts including a $1000 energy rebate, slashed public transport fares and cheaper car registration fees.

The budget will also lift the stamp duty concession threshold from $500,000 to $700,000, cutting taxes for about 10,000 first-home buyers each year.

Queensland was the biggest loser from the reweighting of the GST relativities earlier this year, and is set to receive $469m less in 2024-25, in large part due to its controversial super profit tax on coal companies, which drove up royalty revenue. NSW Treasurer Daniel Mookhey has slammed this year’s ­ GST allocation as “absurd” and says it will cost the state $11.9bn over four years.

The CGC is now probing whether to differentiate between electricity-generating thermal coal and steelmaking metallurgical coal in GST calculations by implementing new price bands, which Mr Dick said would cost Queensland another $500m each year from 2025-26.

“So we think this is entirely unacceptable to our state and we are being penalised unfairly for implementing a coal royalty regime, which we think is absolutely appropriate and fair for Queensland,” he told The Australian.

“We’ve made a decision that Queenslanders should get their fair share from the coal t they own … and we don’t want Queenslanders to be penalised or disadvantaged because the Commonwealth Grants Commission wants to move the goalposts on how it manages royalties.”

The federal government divides GST revenue between states and territories to ensure each jurisdiction can provide comparable services, taking into account their abilities to raise revenue from state taxes such as mining royalties.

In its submission to the CGC, NSW argues Queensland had much greater revenue-generating capacity because of its large deposits of high-value metallurgical coal. In NSW, 88 per cent of coal produced is thermal, which is not as valuable and generates less royalties.

“Since NSW produces significantly less metallurgical coal, it does not have a comparable fiscal advantage to Queensland,” the submission read.

“Separately assessing coal by type would be entirely consistent with the rationale for a mineral-by-mineral approach.

“Maintaining a combined assessment of coal is not justified.”

NSW also levies its coal as a flat percentage rate, unlike Queensland, which has a three-tier taxing system allowing it to reap a greater royalty share when prices spike.

Queensland Treasury argues any changes would “severely and unfairly impact” the state for its overhaul of its coal royalty regime in 2022. “To the extent that this deters other states from making similar policy changes, this would leave Australians as a whole worse off,” its submission read.

“Queensland’s progressive coal royalty rates are specifically designed so that, during periods of high global coal prices when coal companies are making extraordinary revenues and profits, all Queenslanders will receive a fair share of the benefits from the sale of the state’s natural and limited resources.”