It is okay for politicians to kick coal in the guts all year but at budget time all those royalties make their bottom lines look really good and the pollies all want to line up and take credit for it.

This week Queensland and New South Wales had some real numbers to substantiate the impact of coal on their respective economies.

Higher than expected revenue from export coal royalties contributed the lion’s share of Queensland’s revised $2.026 billion surplus for 2016-17, treasurer Curtis Pitt had to admit.

The 2016-17 Mid-Year Fiscal and Economic Review revealed the surplus was the largest net operating surplus since 2005-06.

While having to recognise coal mining effectively helped get the Queensland economy back on its feet, the ungrateful Treasurer gleefully claimed it was all his government’s doing and that it was planning for an economy without a strong mining contribution.

“Our economic plan is helping to further diversify Queensland’s already strong, diversified, and growing economy and transition it to a post-mining boom economy,” Pitt said.

“The MYFER outcomes show we are on track for nation-leading economic growth and we are making the right investments in job-creating infrastructure and frontline services while recognising the needs of regions doing it tough as we transition to a post-mining boom economy.”

Great, the Treasurer thinks he can wave his magic wand and attract a few start-up industries and that will replace the billions of revenue the state gets from coal. Good luck with that.

As Queensland Resources Council CEO Ian Macfarlane said, the surplus forecast was a welcome reminder that when the natural resources sector was doing well, the entire Queensland economy benefited.

“An increase in coal prices delivers more revenue to Treasury,” he said.

Over in NSW, where horse stud owners like to call the shots in the Hunter Valley, especially when planned coal mines that employ hundreds of people happen to spoil the view for their multi-million dollar thoroughbred horses, the numbers once again speak for themselves.

The contribution of mining royalties to New South Wales cannot be overlooked with royalty revenue being revised up by $108 million in 2016-17.

Premier Mike Baird must be aware of this very salient fact, especially as he knows the strong state economy is going to increasingly rely on its mining royalties once the housing boom slows down in Sydney and stops providing rich streams of stamp duty to the state’s coffers.

While he made all the right noises to his mates in the National Party about protecting farm land, his government is reconsidering Anglo American’s proposed Drayton South extension after it was initially knocked back last year.

Baird is a popular guy and he doesn’t like disappointing people – even coal miners.

He knows 500 jobs are on the line with the Drayton South expansion. 

More importantly he knows he needs billions of dollars to carry out his ambitious rail infrastructure and road-building program in Sydney. Not to mention the other debts that tend to get needed around election time to keep voters in marginal electorates happy.

 

Hogsback thinks the recent run up in coal prices might even win a few more friends for coal. Fair weather friends might be better than no friends at all.