WA forgoing more than $500m of gold royalty revenue as State Government rules out adopting recommended rate

The State Government is set to miss out on more than $500 million this financial year by not adopting its recommended gold royalty rate. A royalty rate rise was ruled out by the Cook Government on Wednesday, reigniting debate over whether the State’s minted miners are paying their fair share. “The Government is not reviewing the gold royalty and has no plans to change the existing rate,” Acting Mines Minister Don Punch said. Local miners are enjoying record profit margins from the precious metal’s price perpetually climbing to new heights over the past two years. An ounce of gold bullion is currently fetching $7485, a rise of more than 145 per cent since the start of 2024. WA’s miners pay a royalty of 2.5 per cent on the value of gold they produce, a rate that has been static since 1998 when then Resources Minister Colin Barnett instigated the policy of gold royalties. In March 2015, with gold at about $1520/oz, a review by the Department of Mines and Petroleum recommended the gold royalty rate be increased from 2.5 per cent to 3.75 per cent. Former Treasurer Ben Wyatt in 2017 tried to introduce the recommended 3.75 per cent rate but a fierce industry backlash killed off his proposal. The State Government reaped $739m in gold royalties during the 2025 financial year while leaving $369.4m on the table by not adopting a 3.75 per cent rate, budget papers show. WA is on track to forgo about $525m of gold royalty revenue this financial year, based on a conservative assumption that production will remain steady and an ounce of bullion maintains its average of $5860 since June 30 last year. “When prices have gone through the roof and gold mines are making a fortune, it’s only fair that the Western Australian public, as owners of the resource, get a reasonable cut of that,” Rod Campbell, research director at think tank The Australia Institute, said. “A royalty system should make sure the public gets an equitable return if there’s commodity price upside and that’s what progressive royalty schemes do.” He pointed to Queensland’s gold royalty rate, which slides between 2.5 and 5 per cent depending on the gold price, as a sterling example. But not everyone agrees. Mr Barnett, who became public enemy number one for WA’s gold industry when he pioneered the introduction of royalties three decades ago, reckons the current rate should stay. “The gold industry, on an equality basis, could probably be paying a bit more than they are, but I’d leave it (the royalty rate) alone for now,” the former WA premier said. “Gold was the basis of the resources industry here and there’s a large number of local small to medium producers, while other commodities are all concentrated in terms of production by big companies and international companies. “So gold is a bit different to the others, it’s very much a WA-run industry and I think leaving the rate alone is recognition of this.” Chamber of Minerals and Energy WA chief executive Aaron Morey said gold royalty revenue has already more than quadrupled since 2015, with more than $1 billion estimated this financial year. “This is nearly enough to fund the salaries of every single WA police officer,” he said. “That royalty growth simply would not have happened if the rate had been increased last decade. “Stable and competitive royalty settings have played a critical role attracting the capital needed to more than double our gold sector’s on-site workforce to nearly 36,000 (full-time employees) over the past decade. “Those 18,000 new jobs have helped offset recent downturns in WA’s nickel and lithium industries, cushioning families and communities from the impact of global commodity price cycles.” University of Western Australia mineral economist Allan Trench believes the royalty debate should focus on how to grow the gold industry for WA’s long-term prosperity. “The debate should be around how do we grow the pie, not how we slice up the existing pie,” Dr Trench said. “The government should be engaging with industry to help get more gold mines out there, boosting production and not milking the value of existing production should be the priority.”