I haven't had time to do a proper review of the 2010-2011 NSW budget. However, I did want to look at royalty payments since most of these come from New England.
The table below provides a summary of some revenue variables.
|08-09 actual $m||09-10 revised $m||10-11 budget $m|
|less Commonwealth payments||22,309||26,798||26,741|
|State source revenue||27,354||28,694||30,928|
You can see just how important Commonwealth payments to NSW are. This creates a practical management problem for the NSW Treasury because of uncertainties associated with the level and timing of Commonwealth payments.
I was surprised at the fall in the royalty amount in 2009-2010. Royalty payments had been rising sharply. Why, then, did they fall? The answer appears to lie in the value of the Australian dollar.
Methods of calculating royalty payments vary between the states. In the NSW case, the rise in the value of the Australian dollar reduced $A payments to mining companies. The huge rise in projected royalty payments in 2010-2011, 48.5% of the projected increase in state source revenues, is due in part to the decline in the value of the Australian dollar, more to projected increases in production.