Coal royalties fund pre-election splurge

Treasurer Curtis Pitt owes China's coal market a debt of gratitude as the state reaps the windfall from a surge in royalties.

A one-off surge in coal prices has come at the perfect time for Queensland Premier Annastacia Palaszczuk as Labor lays down the foundations for a tough election campaign.

Blessed with a $2.8 billion windfall over the past 12 months, the state government has lifted health and education spending and directed funds towards a string of projects across the state.

The minority government has also allocated another $1.95 billion towards its number one project, the $5.4 billion Cross River Rail project, declaring it can go it alone on the tunnel development without the Turnbull government's help, if necessary.

The spending spree puts the government in a stronger position to fight the upcoming election, due by early next year, than it might have otherwise been.

In that sense, Treasurer Curtis Pitt owes a debt of gratitude to China, where a decline in coal production, logistical bottlenecks and supply constraints saw prices surge over the past 12 months.

The good times are not set to continue, however, with coal royalties set to slide by around $1.1 billion over the next two financial years and the budget surplus expected to drop to around $146 million in 2017/18

That's a problem for next year, however, and in the meantime Labor will be spruiking the selling point of this year's budget - "jobs, jobs, jobs" - all the way up to a fast-approaching election.


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Source: AAP


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