Rate freeze welcome as royalties hit record for NSW
Statement from NSWMC CEO Stephen Galilee
The Deputy Premier’s commitment today that a re-elected NSW Liberal/Nationals Government will freeze coal royalties for the duration of the coal price cap is an acknowledgement of the heavy burden being borne by NSW coal producers impacted by the coal price cap policy.
The commitment will be welcomed by coal mining families and communities across NSW, and it is hoped it will receive bipartisan support ahead of the approaching NSW election.
The Deputy Premier’s commitment follows Treasurer Matt Kean’s support for the NSW coal industry last week, promising not to raise coal royalties in the next budget if re-elected.
The commitment by the Deputy Premier also coincides with the release of the mid-year NSW Budget Update, showing mining royalties expected to deliver a record $6 billion in revenue to the NSW Government in this financial year alone.
This is $2 billion higher than previous Treasury forecasts, representing a significant windfall for the NSW Government this year due to high global coal export prices.
The current royalty rates are clearly working to deliver higher returns for the people of NSW when global coal prices are higher.
NSW mining royalty revenues have grown significantly in recent years, rising from $1.4 billion in 2020-21 to $3.7 billion in 2021-22, and now to $6 billion in this financial year.
This means mining royalties are set to contribute 6 percent of total NSW government revenues this financial year, up from just 1.6 percent in 2020-21.
At least part of this additional $2 billion in windfall royalty revenues could have been used to provide energy price relief in a much simpler, logical and direct manner than the complicated and problematic coal price cap arrangements being imposed on the sector.