NSW’s $2.7b coal royalty increase hike won’t cost jobs, investment: treasurer

afr.com:

NSW Treasurer Daniel Mookhey says a new $2.7 billion plan to raise coal royalties in the state will not cost jobs or put brakes on investment.

A day after it extended a possible lifeline to keep the state’s largest coal-fired power station in operation for longer, the Minns government announced it would increase coal royalties by 2.6 percentage points from July next year.

The change will lift the top tax rate on coal producers to 10.8 per cent, and form the centrepiece of the state Labor government’s first budget due to be handed down in two weeks.

NSW coal operators such as the Tahmoor coking coal min in Bargo face higher royalties. Oscar Colman

The higher royalty rate is expected to generate more than $2.7 billion over four years from 2024-25, said Mr Mookhey, who described the plan as way to make sure the state got a fairer share from its resources.

“This is a fair outcome for the people of NSW. The old system is out of date. The market has moved on. That’s why we are modernising the state’s coal royalties,” the treasurer said.

From July 1, 2024, the new rate for open cut mining will be 10.8 per cent, while the rate for underground mining will be 9.8 per cent and the rate for deep underground mining will be 8.8 per cent. The rates are currently 8.2 per cent, 7.2 per cent and 6.2 per cent respectively.

Existing discounts for underground and deep underground mining will continue.

The Minerals Council of NSW said the plan would place a “significant additional impost” on the industry, which directly employs nearly 30,000 people in NSW and supports 180,000 indirect jobs. The 2.8 per cent royalty increase would translate to a 30 per cent increase in royalty costs, it said.

“While realistic about the likelihood of an