Implementing A Progressive Coal Royalty Scheme

Today Abigail called on the NSW Labor Government to implement a progressive coal royalty scheme so that big mining companies pay their fair share.

Ms Boyd says—


I give notice that on the next sitting day I will move: 

(1) That this House notes that:

(a) under NSW’s coal royalty scheme, a flat rate is applied to the value of coal produced depending on the type of coal mine (with open cut mines paying a royalty of 8.2% of the sale value of the coal, underground mines paying 7.2% and deep underground mines paying 6.2%);

(b) the last time coal royalty rates were changed in NSW was 15 years ago (when they were increased by 1.2%);

(c) the Queensland coal royalty system is progressive, meaning that as the coal price increases the rate of royalty increases at staggered intervals; 

(d) commencing in July last year, Queensland updated its coal royalty scheme to provide for the old maximum rate of 15% to apply at prices over $150 per tonne, added three additional tiers over $175 per tonne and applied a new maximum rate of 40% to prices over $300 per tonne; and

(e) the changes to Queensland’s royalty scheme have not had any material impacts on the coal industry or the viability of producers, given the increases have been applied only at relatively high prices.

(2) That this House notes that:

(a) according to a research paper by The Australia Institute entitled “Northern Direction: If NSW had the Queensland coal royalty system” published in March 2023, NSW would have raised an additional $2.8 billion in 2021-22 had it adopted Queensland’s progressive coal royalty system and could raise between $4.2 billion and $6.2 billion in additional royalties for the 2022-23 financial year; and

(b)given State budget constraints and the continued profitability of the fossil fuel industry, there is scope for NSW to adopt higher royalty rates than Queensland has implemented and to raise upwards of an additional $25bn by 2026.

(2) That this House calls on the NSW Government to urgently implement a progressive coal royalty scheme similar to that adopted in Queensland in order to ensure that the State has sufficient revenue to pay for public sector wage rises and other essential expenditure.

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