Half Yearly Budget Review sees coal royalties plunge $705 million
MEDIA RELEASE – 17 December 2015
The Greens NSW mining spokesperson Jeremy Buckingham today said that his previously stated concern that coal royalties had been overestimated had come to pass after NSW Treasury reduced mining royalty estimates over the forward estimates period by $705 million, with a reduction of $109 million for the 2015-16 financial year.
“Forecast revenue from mining royalties in the forward estimates period has been reduced by $705 million since Budget. The reduction is mostly due to significantly lower coal export volumes than expected at Budget, coupled with a larger fall in coal prices than anticipated. These factors are driven by an oversupply of coal and weaker global demand, particularly from China. Lower coal prices are only partially offset by a lower Australian dollar.”
“Treasury’s budget forecasts were for a heroic 12% growth in coal royalties through the forward estimates, but once again this has proved to be wrong and follows the pattern of Treasury massively overestimating royalties over the last few years,” said Greens MP Jeremy Buckingham.
“It is clear that coal is in structural decline with a global oversupply, a major decline in demand and with climate and air pollution policies being adopted that mean the end to the fossil fuel era. It’s time Treasury and the NSW Government recognised this reality and adjusted their policies.
The graph below shows the consistent overly optimistic forecasts (dotted lines) from NSW Treasury.
Contact: Max Phillips – 9230 2202 or 0419 444 916