« Back to Publications

Now is the perfect time to increase coal royalties to fund Australia’s energy transition

TJ Ryan Foundation Research Associate, John Quiggin, comments in The Guardian (17.6.22) on the Palaszczuk government’s move to raise royalty rates for the state’s coal mines. With criticism coming from the mining sector, the author argues that ‘the usual trade-off between maximising revenue while protecting industry’s long-term future no longer applies’.

‘After dealing with multiple natural disasters, and facing the need for huge investment in an overloaded electricity system, it’s not surprising the Queensland government is in search of extra revenue ahead of next week’s budget. The obvious source, already flagged by the treasurer, Cameron Dick, is an increase in royalty rates for coal.

‘These rates, set on a sliding scale according to the price of coal, have been frozen for the last 10 years, as promised by the Newman LNP government after a small increase in 2012. With the 10-year freeze now expired, resources groups are lobbying intensely for no changes to the existing regime. But there is a logical case for increasing royalties on coal, which is currently trading at spectacularly high prices.

‘… Queensland’s focus must be on gaining additional revenue while export demand remains strong and using it to transform our energy system. The transition to a carbon-free energy system will require big capital expenditures.’

Pay up: mining and gambling companies told not to expect sympathy over Queensland tax hikes

Eden Gillespie and Joe Hinchliffe report in The Guardian (24.8.22) on the state government’s move to increase coal mining royalties in its recently announced budget.

‘Resources and gambling companies have been told to “pull their head in” and not expect public sympathy after taking high-profile actions to resist recent tax increases by the Queensland government.

‘BHP’s chief executive, Mike Henry, last week said the mining giant would pause plans for its Blackwater South coalmine because of the state’s new royalty regime, unveiled as part of the June budget.

‘Henry said the royalty changes “didn’t involve any engagement with industry” and increased risk for the company in Queensland.

‘The move came amid windfall profits for BHP and despite the fact the company sought environmental approval from the federal government for the mine on 8 June, after the Queensland government had already flagged it was on the verge of increasing royalties. The mine is not expected to open before 2029.’

The TJRyan Foundation does not guarantee the accuracy, currency or completeness of any information or material available on this website. The TJRyan Foundation reserves the right to change information or material on this website at any time without notice. Links from this site to external, non-TJRyan Foundation websites should not be construed as implying any relationship with and/or endorsement of the external site or its content by the TJR Foundation, nor any commercial relationship with the owners of any external site. Should any TJRyan research project be funded by an individual or organisation the source of funding will be stated beside the research report. In all other cases contributions are provided on a pro bono basis.
Receive the latest news

Subscribe To Our Newsletter

Get notified about new articles

This field is for validation purposes and should be left unchanged.