States at odds over coal royalty revenue, GST cut

States at odds over coal royalty revenue, GST cut Coal royalties were expected to add $11.388 billion to Queensland's 2023 2024 budget bottom line.

Queensland has rejected NSW's call for a coal revenue overhaul, saying it should not be punished for implementing its own lucrative royalties scheme.

Queensland Deputy Premier Cameron Dick hit back after it emerged the Commonwealth Grants Commission was looking at how coal royalties revenue was calculated following a NSW government submission.

The commission is determining whether to change how different types of coal are assessed in GST calculations, with the Queensland government claiming it will cost the state $500 million each year from 2025-26.

Mr Dick said on Monday that Queensland should not be treated differently following strong returns on coal royalties since 2022.

At the 2023-2024 budget update, Queensland's coal royalties - excluding land rents - were expected to total $11.388 billion.

"We don't think Queensland should be treated differently," Mr Dick said.

"We're doing our bit and we shouldn't be punished for implementing our own royalty scheme when that scheme is lifting the GST boat for all states."

The commission advises the commonwealth, which distributes GST revenue by taking into account each state and territory's ability to raise earnings from taxes such as mining royalties.

The NSW government has pushed for a coal revenue overhaul after slamming this year's GST allocation, saying it will cost the state almost $12 billion over four years.

The commission is looking at whether to differentiate between thermal and metallurgical coal in GST calculations with new price bands.

Mr Dick said he did not agree with a per capita approach put forward by his NSW counterparts.

"I don't think you can divide up coal into either its calorific content...we don't think that makes any sense," he said.

"We will continue to demand that Queensland be treated fairly by the Commonwealth Grants Commission and other states."

The Queensland government has moved to legislate its supertax on coal profits, making it harder to change the divisive royalty hike in the future.

The royalty scheme was introduced in July 2022 after a 10-year freeze, ensuring miners pay a larger proportion of tax for coal in an additional three-tier system.

A parliamentary hearing into the legislation heard on Monday that the tiers were designed to ensure Queensland receives a greater and fairer return on the use of the state's resources, particularly when coal prices were high.

"The three new tiers were 20 per cent on the part of the average price per tonne that is more than AUD $175 but not more than AUD $225," under Treasurer Michael Carey told the hearing.

"Thirty per cent on that part that is more than AUD $225 but not more than AUD $300, and 40 per cent on the part that is more than AUD $300 a tonne."

Mr Carey said that since the introduction of royalty tiers the state had benefited from strong interest and investment.

"Largely, those investments and that work is driven by international factors and the strong competitive advantages that the Queensland coal industry has," he said.

"While the state does reap more from those higher-end tiers, coal miners themselves are enjoying very significant profitability during those periods."

  • https://www.msn.com/en-au/news/australia/states-at-odds-over-coal-royalty-revenue-gst-cut/ar-BB1nVWuu?ocid=00000000

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