The Queensland treasury department concedes coking coal prices have averaged US$190 per tonne in the first half of 2017-18 but then assumes the coking coal price will only average $161/t for the whole year. 

“If they are correct, then the coking coal price has to fall back to $132 per tonne in the second half,” said Roche, who is now McCullough Robertson Lawyers strategic advisor.

“Treasury has also been conservative on thermal coal prices which have averaged $94 per tonne, compared to a revised assumed price of $83 for the year as a whole.

“There are only two possibilities: either Treasury is right and coal prices are going to dive in the second half of the year from current levels or else Treasurer Trad will be declaring in her first budget next June the best part of an additional $1 billion in coal royalty revenue for 2017-18. 

“My vote is on the latter scenario and that this additional coal royalty windfall has been salted away for Treasurer Trad's first budget in June 2018.”

QRC CEO Ian Macfarlane said the Mid-Year Financial Economic Review yet again showed resources, especially coal, underpinned the budget.

“Coal royalties are expected to reach $414 million above the 2017-18 budget forecast or $3.16 billion forecast over the financial year,” he said.

“Revenues from all resources including coal, gas and metals not only pay the wages of teachers, nurses and police they build the schools, hospitals and police stations.

“The extra coal royalties alone would pay for the North Queensland Stadium [$250 million], four schools such as the new state school at Caloundra South [4 x $34 million] and three police stations in the regions [3 x $8.3 million].”