NSW mulls coal royalty revamp

afr.com:

The NSW government will mull a revamp of coal royalties ahead of the state budget in September and has asked the industry and key trading partners for input.

The prospect of a NSW coal royalty overhaul comes a year after Queensland increased taxes on coal miners and rode a commodities boom which helped to deliver a $12 billion state budget surplus last month – the highest in any state’s history.

NSW Treasurer Daniel Mookhey will ask the coal industry, power stations and unions for their input into life after the coal cap. AAP

The Minns government will put a shake-up of the royalty system on the table on Thursday as part of a broader consultation with coal miners, power generators and trading partners on what steps should be taken when the state’s temporary coal price cap expires on July 1, 2024.

A $125 a tonne cap for 18 months on the price of coal sold to domestic power generators was imposed in February as part of NSW and federal government efforts to limit electricity price rises on the east coast. It was implemented after Russian commodities were blacklisted in 2022 after it invaded Ukraine, which sent coal prices beyond $500 a tonne.

NSW Treasurer Daniel Mookhey says the consultation is designed to consider “all options to keep electricity bills down” as the clock runs down to mid-next year on the price cap.

“In the lead up to the budget, we are focused on helping families with the cost of living, funding essential services and repairing the budget position.”

In particular, the government is inviting input to understand the effect: “of a possible new coal royalty rate system, or adjusting existing royalty rates, to respond to market conditions”; of the coal price cap on the coal industry and electricity market; on