The News South Wales government’s move to increase the State’s coal royalty levy by 1.2% across the board is a naked grab for cash, according to the State’s coal miners.
Yesterday’s NSW mini-budget has been met with harsh criticism from the mining industry, after it delivered what the State’s miners feared, an increase in coal royalty rates and removal of transport costs as an allowable deduction for the purposes of calculating coal royalties.
NSW Minerals Council CEO Dr Nikki Williams told MINING DAILY that the State’s miners are astounded at this naked cash grab.
“The decision by the NSW government to raise additional revenue through increases in coal royalties is incredibly short sighted, and provides a very clear signal that, despite its claims that it is open for business, this State is most definitely slamming shut the door to investment,” Williams said.
“At a time when the global economy is slowing and the State is crying out for stimulus to drive investment and promote economic growth, the NSW Government has gone for a quick fix in the shape of a tax hike.
“This is in contrast to the Federal Government’s use of monetary and fiscal stimulus to jump start the economy.”
According to government forecasts, which are based on assumed currency averages of USD$0.72, the rate increase is expected to increase revenue by $152 million in 2008-09.
According to the NSW Minerals Council, the NSW coal mining industry will deliver $840 million to the people of NSW in royalties in 2008-2009, rising to $1.3 billion next year under the current royalty regime.
“Yet the industry’s capacity to pay is finely poised,” Williams said.
“The new royalty regime will slug the industry with a further $1.2 billion over the next three years.
“There is a fine line between a fair return for the State and taxing an industry into oblivion.”
MINING DAILY contacted the offices of NSW Treasurer Eric Roozendaal and the NSW Minister for Primary Industries Eric Roozendaal, but both were unavailable for comment.