Australian states and territories are set to earn over $73 billion in mining royalties between 2024–25 and 2027–28. This report highlights the role of mining royalties in funding public services and infrastructure.

It finds that mining royalties provide essential own-source revenue for state governments, enabling them to fund crucial public services such as health, education, transport and law enforcement. It raises concerns about the potential economic consequences of losing royalty revenue.

The report examines alternative mechanisms for capturing resource value, such as resource rent taxes or state-owned enterprises like Norway’s Equinor. However, it concludes that Australia’s current royalty model — while not perfect — is broadly efficient, particularly given the high level of foreign ownership in the mining sector.

Key policy recommendations

• Restoring Queensland’s previous royalty rates for existing coal projects. This will rebuild investor confidence.
• Reforming the Commonwealth’s Petroleum Resource Rent Tax (PRRT) which has consistently underperformed expectations.
• Reducing regulatory barriers to accelerate the development of Australia’s critical minerals sector.
• Strengthening fiscal discipline at the state level to prepare for potential declines in fossil fuel royalties.