NSW Treasury projects $3.4 bn coal royalty surge tied to Middle East war

The New South Wales budget shows that the conflict in the Middle East has lifted demand for thermal coal, pushing prices up more than 20 % as Asian buyers switch from gas to coal. As a result, the state expects to collect about $3.2 billion in coal royalties over the next 12 months, rising to $3.4 billion the following year. Budget revisions increase royalties by $84 million for 2025‑26 and $186 million for 2026‑27.

Funds earmarked from the windfall include $119.1 million for the Singleton bypass, $258.2 million for continued work on the Muswellbrook Bypass, $45 million for Stage 3 of the Muswellbrook Hospital redevelopment, $8.1 million for Phase 1 of the Muswellbrook‑Armidale regional road corridor (with an additional $18 million for Phase 2), and a public early‑learning centre at Muswellbrook Public School. Upper Hunter MP Dave Layzell criticised the budget for lacking money for maternity services, community preschools and the national gun‑buyback program.