But the downturn in the coal industry is causing headaches for the government in the form of reduced royalties with mining revenues falling by around $60 million to be $300 million lower than Treasury forecasts in the last financial year.
The lack of a significant funding commitment for the Resources for Regions program will be of concern to mining communities, and a fall in mining royalties highlights the need for real action on planning reform, NSW Minerals council CEO Stephen Galilee said.
“The Budget allocates funding to deliver the Premier’s commitment to halve the time it takes to assess state significant mining projects. It’s important that this funding is now used to deliver real reform,” he said.
“In the Hunter alone, over 1800 jobs have been hanging in the balance for over three years, stuck in the broken planning system. Across NSW, PriceWaterhouseCoopers estimates around 20,000 current and potential mining-related jobs are caught up in a state planning system that moves with glacial speed.
“In addition, a fall in mining royalties demonstrates the need for planning reforms that deliver faster project approvals.
“Last year we warned that the Treasury forecasts on royalties were overly optimistic, and we have been proven right. This year the Treasury is forecasting mining royalties to grow by around 12% on average over the forward estimates, and to deliver nearly $6 billion to NSW taxpayers over the next four years.
“This again, is very optimistic considering expectations of moderate growth in world coal prices. Although demand for NSW coal will continue to rise, export volumes will not deliver the forecast revenues unless key mining projects are approved in NSW.”
The Budget contains some welcome funding commitments for the Hunter, including the reservation of $100 million from the Hunter Infrastructure and Investment Fund and commitments to reserve $92 million for the Singleton Bypass and $68 million for the Muswellbrook Bypass from the Rebuilding NSW fund.
“However, mining communities across NSW will be disappointed by the lack of any significant additional funding commitment to the Resources for Regions program,” Galilee said.
“Confirmation in the Budget of the continued allocation of 3% of Restart NSW funding to the Resources for Regions program is good, but the $9 million actually reserved is miniscule given total additional Restart NSW reservations are nearly $4.3 billion.
“Mining communities across NSW will be hoping for further funding announcements on Resources for Regions in the very near future.