STATE FUNDING — WESTERN AUSTRALIA

What Western Australia Sells, And What It Keeps

The Department of Mines, Petroleum and Exploration reported mineral and petroleum sales of $220 billion in 2024–25 — $171 billion in minerals and roughly $49 billion in petroleum. Iron ore alone was $122 billion on near-record output of 864 million tonnes. Gold reached an all-time record $29 billion. LNG was $36 billion.

Against that, the state collected $10.6 billion in royalties and related grants — and roughly $1.1 billion of that is North West Shelf grants paid by the Commonwealth, not royalty Western Australia levied.

That is 4.8 per cent, part of which is not the state’s own charge at all.

Commodity By Commodity

Current rates are those prescribed by the Mining (Royalties) Regulations 2025: 7.5 per cent on bulk ore, 5 per cent on concentrates, 2.5 per cent on metal and on gold. The levy column applies the published Sovereign Australia rate schedule to Western Australian sales.

Commodity	WA sales 2024–25	Charged today headline rate	Under the levy	Increase
Iron ore	$122b	7.5%$9.15b	23.7%$28.9b	3.2×
LNG	$36b	nilto WA	27.5%$9.90b	new
Gold	$29b	2.5%$0.73b	21.9%$6.35b	8.8×
Oil, condensate, LPG	$13b	nilto WA	25.4%$3.30b	new
Alumina and bauxite	$8.2b	5%$0.41b	11.5%$0.94b	2.3×
Lithium	$4.3b	5%$0.21b	7.2%$0.31b	1.4×
Nickel	$3.9b	2.5%$0.10b	5.0%$0.20b	2.0×
Mineral sands	$1.4b	5%$0.07b	10%$0.14b	2.0×
Manganese	$0.41b	5%$0.02b	10%$0.04b	2.0×
Other minerals	$1.8b	~4%$0.07b	10%$0.18b	2.5×
Total	$220b	4.9%$10.8b	22.9%$50.3b	4.7×

The third column applies the headline rate to total sales. It is not what the state actually banked. Some iron ore is produced under State Agreement Acts at negotiated rates, beneficiated ore and concentrates are charged at 5 per cent rather than 7.5, gold carries an exemption on the first 2,500 ounces a year, and royalty is assessed on royalty value rather than gross sales. The effective rate is lower than the headline rate, not higher — which strengthens the point rather than weakening it.

Two lines carry most of the argument. Iron ore is charged at 7.5 per cent on $122 billion of sales. And gold is charged at two and a half per cent — on a record $29 billion at a record price.

Where The Money Goes

The levy is collected once by the Commonwealth and divided by a formula fixed in legislation. A state receives a quarter of what is raised on its own ground — not a national pool divided by need.

Recipient	Share	On WA ground	Today
Commonwealth	73%	$36.7b	Company tax on extraction, PRRT, NWS royalty
Western Australia	25%	$12.6b	$10.6b, including Commonwealth grants
Traditional Owners	2%	$1.0b	Nil — WA has no statutory share
Levy raised on WA ground		$50.3b

The Commonwealth’s 73 per cent replaces the company tax on extraction it already collects from Western Australian operations and which the state never sees. It is not a new impost on top.

The GST Half

The levy alone leaves every state behind. The reform that closes the gap is the second half of the package: the rate rises from 10 to 12 per cent with every additional dollar going to the states, and the distribution formula is replaced with a single rule — GST returns to the state where it was spent. Horizontal fiscal equalisation and the Grants Commission’s role as distributor are abolished.

Jurisdiction	Levy share, own production	Levy share, offshore	All royalty today	Change in GST	Net position
Western Australia	9.15	2.92	12.79	3.76	+3.04
New South Wales	3.90	0.04	3.10	7.23	+8.07
Victoria	0.33	0.41	0.19	0.82	+1.37
Queensland	6.24	0.08	12.57	5.13	−1.12
Tasmania	0.06	0.00	0.05	−1.44	−1.43
South Australia	0.30	0.04	0.52	−1.88	−2.06
Northern Territory	0.24	0.57	0.33	−3.53	−3.06

Figures are $ billion. Consumption share is proxied by population share, so the GST column is indicative. The Western Australian net position is stated conservatively. This modelling uses $12.79 billion as the royalty the state collects today; the Department of Mines, Petroleum and Exploration’s published figure for 2024–25 is $10.6 billion including Commonwealth grants. On the published figure the net gain is larger. The conservative number is used here deliberately.

Why This Is A Better Deal Than It Looks

Western Australia gains its own gas

The state sells about $49 billion of LNG, oil, condensate and LPG a year and receives almost no royalty on it, because the fields sit in Commonwealth waters. Under the levy that production is charged on the same rule as everything else, and the state component follows the adjacent area the field sits in — a boundary that already exists in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and is administered daily.

The GST penalty ends

Under equalisation, a state that raises its royalties is assessed as having greater fiscal capacity and its GST share falls to match. That is why no state raises them, and why Western Australian rates have barely moved while commodity prices moved several hundred per cent. Remove the clawback and the state can charge properly for what it owns.

The revenue stops collapsing

Iron ore royalties fell from $10.36 billion in 2023–24 toward a forecast $5.77 billion by 2028–29 on price alone. The levy is charged on every tonne sold with a floor band beneath it, so the base does not disappear when the price does.

Traditional Owners are paid

Western Australia has no statutory Aboriginal land rights regime and no statutory royalty share — the only state in that position, and the one with the largest royalty base in the country. Two per cent is roughly $1.0 billion a year, legislated and paid automatically, instead of negotiated project by project behind a confidentiality clause.

What $2 Billion A Year Buys

Two billion dollars is the difference between a state budget that argues over which hospital gets rebuilt and one that rebuilds both. It is roughly the annual operating cost of several hundred additional hospital beds, or a suburban rail extension every year rather than every decade.

Western Australians are not being asked to accept less than they get now. They are being asked to accept a national system in exchange for more revenue, a share of their own gas, an end to the GST penalty, and a legislated share for the people whose country the ore comes out of.