Think tanks and environmental groups have hailed the first hike in NSW coal royalties in 14 years. The rise is expected to raise $2.7 billion over the next four years.
Coal royalties will increase by 2.6 per cent from July next year, delivering taxpayers an expected windfall amid high global coal prices.
The extra cash will be spent on essential services such as housing, filling nursing positions, teachers, and out-of-home care for state wards and foster children.
Record profits in recent years from NSW coal exports have delivered modest returns for the state.
But some experts have called for the government to go further, with a $1 levy on each tonne of embodied carbon in fossil fuel exports.
The shift in NSW comes as resource-rich states bask in budget surpluses on the back of high commodity prices amid their own royalty changes.
The federal government is also proposing changes to the Petroleum Resource Rent Tax, and Queensland increased coal royalties last year whilst Victoria increased royalties on brown coal in 2016 and 2019.
Queensland’s changes delivered a $15 billion bonus to the government, and left it with a $12.3 billion surplus for the last financial year, the largest of any state or territory.
Queensland's three new royalty tiers came into effect in July last year, when coal prices were soaring in the wake of the Ukraine war.
The new royalty rates will replace emergency price caps on domestic coal sales that were put in place in late 2022 to soften the impact of supercharged prices caused by the Ukraine war.