Research released today by The Australia Institute shows that coal mines in Queensland receive a discount on royalty payments of up to 17% relative to similar mines in NSW.
This effective subsidy could be increased under a State Government deal with Adani currently being negotiated.
"Mines like Adani's effectively get 17% of their coal for free thanks to existing Queensland royalty arrangements," said Rod Campbell, Research Director at The Australia Institute.
"If the Adani mine is developed, this royalty loophole would deliver an annual subsidy of between $12 million and $30 million per year.
"If Adani had operated at average export prices over the past decade it would have received up to $223 million.
"On top of this existing subsidy, negotiations are currently underway for a further government deal with Adani, due to be completed on 30 September.
"Rather than holding the Government to account, the state opposition appears to be trying to entrench these subsidies with a policy commitment to freeze coal royalties for ten years.
"The last increase in coal royalties was under the Newman Government. But this affected high value coking coal mines, rather than low-quality thermal coal mines like Adani's.
"Those changes from the end of the Newman's government left Queensland subsidising lower value thermal coal, like from Adani's coal mine.
"Our research shows there is strong public support for ending the subsidy of Queensland's thermal coal mines. 66% of Queenslanders want royalties increased to the same as NSW (49%) or to be higher (17%). (See full chart below)
"Public opposition to subsidising the coal industry is not new in Queensland - the Federal Government's $1 billion loan to Adani was vetoed by the State Government which was returned in the 2016 election.
"Despite this, the Queensland government offering its own subsidized loan to Adani, through its royalty deal, and that is on top of the subsidy built into Queensland's low royalty rates for these mines."
