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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.

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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.


2 min read

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Source: AAP


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