PERTH (miningweekly.com) – Falling commodity prices have forced the Queensland government to slash nearly a A$1-billion from forecast state revenues for 2014/15.

Treasurer Tim Nicholls on Thursday revised the full year revenue from t he previous A$50.1-billion to A$49.1-billion, to reflect the weaker outlook for coal prices, a delay in the start of liquefied natural gas (LNG) exports and a weaker outlook for LNG export prices.

In his budget review, Nicholls noted that coal export volumes have been slightly above forecasts so far in 2014-/5, but this has been more than offset by coal prices continuing to be weaker than forecast. He added that the weakness in prices has been sharper and more sustained than expected.

“The estimated premium hard coking coal price in the 2014/15 budget was $142/t, consistent with the Consensus Economics forecasts available at the time the Budget was finalised. However, the current contract prices have been settled around $20 lower, reflecting a 14% decline in the price.”

Recognising this weaker price outlook, Nicholls said that there were downward revisions to coal royalties totalling A$1.153-billion, or around 10.2%, across the forward estimates, with the largest reductions in 2015-16 and 2016-17.

“There has also been a decline in the royalty estimates for LNG, most notably in 2014/15 and 2015/16 reflecting recently announced production delays and significant reductions in LNG export prices, which are linked to the price of oil.”

The Queensland Resources Council (QRC) acting CEO Greg Lane said that in the face of continuing global market uncertainty, the coal industry would draw comfort from the state government’s decision to leave the current coal royalty regime in place.

“As the QRC has submitted to both the major parties in its 2015 election agenda, there is a pressing need for certainty at home and this could be best delivered in the shape of an iron-clad guarantee not to increase royalties for coal, minerals or gas,” Lane said.

Quoting results from a national tax survey today, Lane noted that minerals companies in 2012/13 paid nearly half of every dollar of profit as royalties and company tax to Australian governments.