Mining future economic opportunities in today’s NSW Budget

Statement from NSW Minerals Council CEO Stephen Galilee

The NSW Treasurer should be commended for delivering a Budget that reduces debt and charts a path back to modest surplus, due in part to future forecast increases in NSW mining royalty revenues.

Today’s Budget also contains several measures the Treasurer’s Budget Papers say are intended to ‘…reduce regulation, fast-track investment and generate the jobs and prosperity of the future.’

As a heavily regulated industry competing for global investment to deliver long-term economic growth and well-paid future jobs across NSW, the mining sector stands ready to assist in these endeavours.

Our sector can deliver billions in additional investment and thousands of jobs for the future – but only with policy settings that support these outcomes, rather than obstruct them.

Mining royalty revenues leading a path to budget surplus

The Budget confirms NSW mining royalty revenues will continue to deliver an important revenue stream for budget repair in the years ahead.

Mining royalties are forecast to deliver $13.2 billion over the forward estimates to 2028-29, representing an increase of $374 million over the revenue forecasts contained in the 2024-25 Half-Yearly Review.

At the same time, the $453 million downward revision in budgeted royalty revenues for 2024-25 is a timely reminder of the volatility of global commodity markets and the cyclical challenges faced by global commodity industries from time to time.

Delivery of the $13.2 billion in future forecast royalty revenue requires a NSW mining sector strong enough to withstand global cyclical challenges.

Our industry is already one of the most heavily regulated in NSW, and operates at world’s best practice standards, including in relation to safety, environmental management and emissions reductions.

Those seeking to impose even more costly regulatory burdens on the NSW mining industry risk making our industry uncompetitive, putting billions in future NSW mining royalty revenues at risk.

Mining communities need outcomes not bureaucracy

These billions in mining royalties are also only possible due to the contribution of the hard working people of our regional mining communities. Without our mining workers, their families and their communities, there would be no mining, and no royalties.

For this reason, the commitment to provide $100m for the ‘Future Jobs and Investment Fund’ is welcome.

However, this funding belatedly replaces the highly successful ‘Resources for Regions’ program previously axed by the NSW Government, cutting funding assistance for 26 mining-related Councils across NSW.

The funding that will now become available must be used to deliver real outcomes for mining communities, and not just add more layers of regional bureaucracy.

In relation to the new ‘Future Jobs and Investment Authority, coal mining operations will be supporting jobs in NSW for several decades or more, including at potential extensions at a number of existing mines.

These coal mining jobs should also be regarded as ‘future’ jobs, warranting support through the activities of the ‘Future Jobs and Investment Authority’ too.

The Budget Papers also make little mention of the NSW Government’s $450m ‘Regional Development Trust’. It is unclear if any initiatives announced in the Budget have been funded from the Trust.

Budget provides opportunities to attract more mining investment

The potential deferral of $250 million in royalties from critical minerals projects is a positive signal to attract future mining investment, noting any revenues foregone under this initiative will be recovered by the NSW Government in later years.

The establishment of the new ‘Investment Delivery Authority’ is also an opportunity to attract more mining investment, and deliver faster delivery of major projects. This will require a focus on existing overly complex and costly assessment processes, particularly in relation to large-scale mining investments which have the potential to turbo-charge the NSW economy and significantly boost the regions.

For example, there are currently proposals for nine new mines in regional NSW, representing a total of more than $2 billion in capital investment and over 2,000 ongoing new jobs.

Several of these projects are already fully approved and ‘shovel-ready.

Securing the private investment needed to get these and other major mining projects underway must be a priority for the NSW Government’s ‘Global Investment Summit’ to be held in October.

Contact: Brad Emery | bemery@nswmining.com.au | 0450620254