Queensland is back in the black after taking a bigger cut on coal exports but wants compensation before it agrees to cap domestic prices.
Prime Minister Anthony Albanese is reportedly considering demanding Queensland and NSW impose their own price caps on coal to ease pressure on household and business power bills.
That comes as Queensland Treasurer Cameron Dick revealed on Wednesday that windfall royalty charges on coal producers will help keep the state’s budget in the black for three of the next four years.
He’s forecast a surplus of almost $5.2 billion in 2022/23 in his mid-year budget update, against a $1 billion deficit predicted six months ago.
That’s on the back of almost $10.7 billion in coal royalty payments flowing into state coffers; more than double the amount predicted in June when windfall royalty rates were introduced.
Royalties, along with higher payroll tax and GST returns, will keep the balance sheets in the black over the forward estimates, except for a $458 million deficit in 2023/24.
The treasurer says a coal price cap won’t hit the royalty income from exporters but he’s wary about its impact on profitable public-owned electricity generators.
“We need to have a look at the final proposal and the detail from the federal government before we can form a view about what that actually looks like when it comes to compensation or support for Queensland if we are to do something that impacts, in a financial sense, on our state,” Mr Dick told a lunch event in Brisbane on Wednesday.
Mr Dick expects to take $21.5 billion in coal royalties over the next four years but admits Treasury’s forecasts are conservative.
The Queensland Resources Council, a coal mining lobby group, has launched an advertising campaign warning that higher royalty payments will deter investment.
QRC chief executive Ian Macfarlane claimed that due to the policy, “in 10 to 20 years time, there will be no jobs in coal mining”.
“They are taking so much that they are killing the golden goose,” he said.
“The resources industry in Queensland underpins the Queensland economy yet it is being absolutely trashed by the Queensland government.”
The treasurer is unapologetic about taking a bigger cut from coal producers, saying it will be partly used to fund decarbonisation plans, critical minerals mining and regional infrastructure.
“Coal royalties are worth fighting for; Queenslanders deserve their fair share and they will receive it,” Mr Dick said.
“The windfall profits made by coal companies are also a win for the people who own these mineral resources, the people of Queensland.”
While coal prices are expected to fall from the second half of 2023, the windfall rates will take total income from coal to almost $21.55 billion over the next four years.
The net debt forecast has been slashed by $400 million to $110.7 billion for 2022/23 and is expected to peak around $700 million lower at $129.3 billion in four years’ time.
Queensland’s economic growth is forecast to be around 2.5 per cent until 2023/24.
The state’s four per cent unemployment rate is expected to rise marginally to 4.25 per cent and the current 5.75 per cent inflation rate is expected to fall to 2.75 per cent by 2023/24.
© AAP 2022
