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$1 Billion in State Revenue Written Down Due to Coal Slump

$1 billion Queensland budget write downDepressed export coal prices forced Queensland Treasurer Tim Nicholls to write down almost $1billion in state revenues for 2014-15, according to the Queensland Resources Council.

Queensland Resources Council Acting Chief Executive Greg Lane said the state government’s mid-year budget review released just before Christmas, has reinforced the strength of the bond between resources sector exports and Queensland’s continuing prosperity.

Mr Lane said that in the face of continuing global market uncertainty, the coal industry would draw comfort from the state government’s decision to leave the current coal royalty regime in place.

“As the QRC has submitted to both the major parties in its 2015 election agenda, there is a pressing need for certainty at home and this could be best delivered in the shape of an iron-clad guarantee not to increase royalties for coal, minerals or gas,” Mr Lane said.

“As reported in a national tax survey today, minerals companies in 2012-13 paid nearly half of every dollar of profit as royalties and company tax to Australian governments.”

Mr Lane said forecasting coal prices and exchange rates in volatile market conditions is a difficult task but Treasury’s revised forecasts appear reasonable.

“The coal industry is delivering some revenue upside by continuing to export record volumes and gas royalties will be boosted in the second half of 2014-15 with LNG exports from Gladstone starting as early as this month.”

“The all-too-often under-rated Queensland metalliferous sector also played its part by delivering higher than budgeted royalty revenues.”

“Another piece of good news is that the budget review confirms the government is on track to deliver a fiscal surplus in 2015-16 and that is going to go a long way towards restoring business and investment confidence,” Mr Lane said.


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