NSW treasurer says higher coal royalties won’t push up power prices

afr.com:

NSW Treasurer Daniel Mookhey says higher taxes on the state’s coal industry will have only a “negligible” risk of increasing power prices, as the Minns government considers whether to follow Queensland’s lead and increase coal royalties.

Declaring that the people of NSW “are entitled to a fair return for their resources”, the government has started consulting 16 coal miners about revamping coal royalties ahead of the state budget in September.

“The preliminary advice we’ve received is that any changes to royalties has a negligible to nil impact on power prices, but we want to test that advice with the market,” Mr Mookhey said on Thursday.

NSW Treasurer Daniel Mookhey says all options are on the table to keep electricity bills down when the coal price caps expire. Dion Georgopoulos

Mr Mookhey defended the move on Thursday, saying that while he had agreed not to increase royalties while the cap on coal prices was in place, all options were on the table when the cap – implemented to curb soaring electricity prices – expires mid-next year.

Coal miner New Hope, which runs two mines in NSW and Queensland, and Whitehaven, which operates four mines in NSW, warned a change to royalties could damage investment in the state.

“Unreasonable royalty rates will impact future growth, halt investment and could create sovereign risk issues, similar to those currently playing out in Queensland,” a New Hope spokesman said.

Whitehaven warned: “The NSW government must exercise caution in ensuring any changes it considers introducing after July next year don’t threaten jobs or undermine the state’s reputation as a reliable trading partner and investment destination, in contrast to what has transpired in Queensland.”

The prospect of a NSW coal