Coal news and updates

Queensland budget papers reveal plummeting revenue from coal

The Queensland government will make almost as much money from motor vehicle registrations as from coal royalties this financial year, state budget papers reveal.

The papers also show the contribution of the fast-growing export industry, based on coal seam gas, is expected to remain less than 1% of total state government revenue in five years time.

The Palaszczuk Labor government, despite facing a plunge in coal royalties from the height of the mining boom, has modestly lifted per capita spending on social services in first budget.

The budget also shows the government has stuck by its promise not to allocate taxpayer funding for the controversial Abbot Point expansion by mining giant Adani – or to assume any income from Australia’s largest proposed mine in the Galilee Basin in the next five years.

Royalties from coal in Queensland, the largest single exporter of any coal outside of Indonesia, made up $3.1bn or 8.4% of government revenue in 2008-9.

But a slump in prices and Chinese demand will see that share sink to $1.68bn or 3.3% in 2015-16. In the same year, revenue from vehicle registrations will reach $1.65bn or 3.2% of total revenue.

Budget estimates show royalties from liquefied natural gas exports – which treasurer Curtis Pitt said were a factor in projected economic growth reaching 4.5% in the next two financial years – will almost quadruple by 2018-19 to $518m.

But even then, they will account for only 0.93% of state revenue.

Asked if the mining industry’s contribution to Queensland’s bottom line had been overstated, Pitt said the budget showed the state was “far more diversified” than a “rocks and crops economy”.

“Of course right now we are experiencing a downturn in commodity prices and that is not just impacting on coal royalties but of course also the price of oil is impacting on LNG,” he said.

“I think that there (are) prospects of those things turning around but we haven’t factored those things into this budget.”

Australia Institute research director, Rod Campbell, said the budget showed the public benefits of mining to taxpayers, through royalties as a measure, were relatively small.

According to Campbell, the outlook for gas also showed it would be far from the cash cow that was coal during the commodities boom.

“The contribution of gas to the state budget is forecast to be pretty limited.”

Campbell said export income was important but the issue with mining was “to what extent it is owned by Australians and how much of that money is staying in Australia”.

“What we really need to be asking is, is it making us better off, and that depends on who’s making the money. And the government is getting some money back but it’s a pretty small amount of money considering what it takes to run a state budget.”

source: http://www.theguardian.com