Queensland has just done global proponents of windfall taxes a favour. On Tuesday, Australia’s third-largest state by population revealed that its revenue from fossil-fuel royalties is likely to have almost tripled over the past 12 months to A$15.3 billion ($10.4 billion). More than a third of the total came courtesy of three new tiers Treasurer Cameron Dick added to the levy last June after coal prices quickly quadrupled. Sure, it was hugely unpopular with the mining industry – Glencore in December said it was shelving a new coal mine there in part because of the increase. But it’s a good advertisement for how such tariffs should work.
top line grew 164% and net profit more than 400% over a similar timeframe when the coal price was close to $400 a tonne. Both companies also have operations in New South Wales, which did not impose an additional levy.
Meanwhile, the extra income allows the state government to direct resources where needed. Dick has earmarked more than A$3 billion for hospitals and healthcare, and at least another A$7 billion for needed renewable energy and water projects. The extra revenue also allowed him to hand out A$550 per household as relief for high power prices caused by the surge in the cost of commodities like coal.
It’s a good model for others to follow, be that New South Wales, the Australian federal government or administrations abroad. And the beauty is that it kicks in when companies ought already to be raking in the cash. It’s a fair trade worth emulating.Queensland Treasurer Cameron Dick on June 13 said Australia’s third-largest state by population is likely to have a net operating surplus of A$12.3 billion, mostly due to an extra A$10.5 billion in revenue from coal and oil royalties.
Dick earmarked the extra fossil-fuel revenue to pay for new hospitals and a slew of renewable energy and water projects. He also said the surplus will “flow through to debt reductions”.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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