Coal royalties decline but Treasury still crazy about coal
MEDIA RELEASE – 23 June 2015
The Greens NSW mining spokesperson Jeremy Buckingham today said the structural decline in coal was reflected in royalties being down $319 million and over $1.1 billion in the forward estimates, and criticised Treasury for once again of forecasting wildly optimistic growth of 12.1% per annum in coal royalties.
Budget Papers Number 1 says (p5-6):
“Forecast royalties in the four years to 2017-18 are now expected to be around $1.1 billion less than in the 2014-15 Budget, mainly due to lower coal prices. However, royalties are still forecast to increase by 12.1% per annum over the four years to 2018-19 as a result of the lower Australian dollar (which increases the Australian dollar price of contracts priced in US dollars) and some increase in coal volumes.”
- Royalties are $319 million down on last budget forecast (20.04% decline) and down $1.1 billion over forward estimates
- Royalties are $87million less than last year (6.4% decline)
- Royalties are lower than in 2008/09
- Treasury is predicting royalties to grow at 12.1% per annum over forward estimates despite growth of only 1.62% per annum since 2008/09
- Royalties only make up 2% of government revenue, coal makes up 95% of royalties
- Treasury are predicting coal price to remain below $75 tonne for the forward estimates
“The contribution of the coal industry to the NSW budget and economy has been exaggerated by industry and government for a long time. The reality is the coal industry and its contribution to the NSW budget will continue to wane as the industry suffers a structural decline in the face of renewable energy technologies and global policies to mitigate climate change,” said Greens MP Jeremy Buckingham.
“It’s crazy-brave for Treasury to predict growth in royalties of 12.1 % per annum for an industry in decline when they have only grown at an average of 1.62% over the last six years.
“It’s time for the Baird Government to plan for a transition away from coal both in terms of the energy system, but also in terms of regional economies and the state budget.”