Victoria’s Royalties for Regions Pledge: What $150M a Year Can Fund

Victoria’s mining royalties currently bring in about $150-151 million a year. Yet Labor’s new pledge to return every dollar of them to the regions is being sold as a major commitment, with a forecast worth more than half a billion dollars.

Premier Ben Carroll announced the policy on or about 10-11 October 2026, explicitly modelled on Western Australia’s Royalties for Regions scheme. It forms part of Labor’s campaign ahead of the 28 November 2026 state election. It remains an election promise, not enacted law.

The government forecasts more than $500 million over four years for regional schools, hospitals and roads. That figure sounds generous until you set it beside what Victoria actually collects.

Here is what the numbers can and cannot deliver, how the plan measures up against Western Australia’s long-running model, and what it signals for miners and investors watching Victoria’s critical minerals pipeline.

What does the $500 million forecast actually tell you?

Start with the receipts. The Minerals Council of Australia (MCA) Victoria put royalties at about $150 million in its 2025 submission and $151 million in its 2026 pre-budget material.

Multiply that by four. At flat levels, Victoria would collect roughly $600 million over a four-year term, before any change in prices, production or royalty rates.

Receipts are not guaranteed to hold flat either, since declining royalty payments nationally show how quickly commodity prices and production can erode the base a hypothecated fund depends on.

So the government’s forecast of “more than $500 million” from coal, gold and mineral sands sits below what steady receipts would already produce.

The gap may reflect timing, cautious price assumptions or a phased start. The difficulty is that no one outside government can check, because no commodity-by-commodity model, price deck or production schedule has been published.

Treasurer Colin Brooks called the plan a responsible way to secure long-term infrastructure funding. Regional Development Minister Michaela Settle said it supplements existing regional spending, which already totals $50 billion. No legislation, special account or budget-paper measure has yet been identified to confirm either claim.

That leaves three open questions:

• Additionality: whether the pool adds new money or relabels spending that would happen anyway
• Legal mechanism: whether it becomes a protected appropriation or stays a policy intention
• Forecast assumptions: which prices, mines and start dates produce the $500 million figure

What this tells you is that the fund is politically visible but small against a state budget measured in tens of billions. Read it as a source of money for specific regional projects, not a shift in Victoria’s fiscal position.

How does Victoria’s plan compare with Western Australia’s model?

Western Australia launched Royalties for Regions in 2008 and gave it a legal footing through the Royalties for Regions Act 2009. Hypothecation is the term for this approach: tying a specific revenue stream to a specific type of spending. WA directs 25% of its forecast annual mining and onshore-petroleum royalties into the scheme, and the fund balance cannot exceed $1 billion at any time.

Hypothecation only makes sense against the wider royalty and tax framework, where state royalties sit alongside federal company tax and each layer captures a different share of resource value.

The scale is large. WA’s 2025-26 Budget allocated about $4 billion over four years, with $1.2 billion disbursed in 2024-25 and more than $6.9 billion invested across over 4,700 regional locations since December 2008.

Victoria proposes 100% of a far smaller base. The two formulas are not equivalent.

WA’s programme also sits inside a much larger regional-services budget. It is an allocation within ordinary spending, not a separate universe of money.

Lessons from WA’s track record

The scheme has survived nearly two decades, but scrutiny has been persistent:

• Unclear outcomes: the WA Auditor-General’s 2014 review found substantial infrastructure delivered, yet could not confirm intended outcomes were achieved
• Thin evidence base: the Grattan Institute identified incomplete business cases, few evaluations and no success metrics in the earlier programme
• Distorted priorities: the Economic Regulation Authority argued in 2014 that hypothecation was inefficient and that regional funding should run through the annual budget

For you, WA shows a royalty-return model can last politically. Durability does not prove results, so a Victorian fund would need published objectives, cost-benefit tests and outcome measures from day one.

Where does industry sit, and what are Avonbank and Sunday Creek worth to the story?

Industry welcomed the pledge quickly. James Sorahan, Executive Director of MCA Victoria, backed the policy, saying reinvestment could ease pressure on roads, trade skills, childcare and healthcare. It matches the council’s long-running push to return royalties to host communities.

The MCA links that argument to social licence, the community acceptance mines need to operate. It says mining already invests $570 million a year in Victorian community support, while also calling for competitive taxes, an exploration offset and a royalty phase-in for new mines.

Labor points to two projects as proof a critical minerals boom is coming.

Avonbank also holds federal approval under the Environment Protection and Biodiversity Conservation Act, granted 4 April 2025. Sunday Creek had logged 283 drill holes and 136,941 metres by 2 September 2026.

Not everyone is persuaded. Horsham Rural City Council said significant concerns about commitments and transparency remained after the Avonbank licence, and Mine Free Wimmera Farms opposed the approval outright.

Political rivals are pitching elsewhere. Opposition Leader Jess Wilson has offered 10 technical colleges, while the Greens want coal and gas royalties doubled, with no stated view on Labor’s pool.

Treat these projects as a pipeline with years of approvals still ahead, not income the fund can count on in its first term.

For readers wanting the project detail, our full explainer on the Avonbank licence shows why the 20-year term leaves half the planned mine life dependent on future approvals.

What could this mean for critical minerals investment sentiment in Victoria?

On its face, the pledge sends a friendly signal: visible local benefit could soften community resistance. There is also no evidence it raises royalty rates.

The sentiment risk lies elsewhere. Costs, approval timelines and the possibility of future royalty changes matter far more than where the money is spent.

Delivery is the weak point. With Avonbank operations not expected until 2029 and Sunday Creek earlier still, the forecast could arrive late or fall short. No independent estimate exists of royalties from antimony, titanium, zircon or rare earths separately.

If you are weighing Victorian exposure, watch these four variables:

1. Election result and legislative form: whether a re-elected government legislates the fund
2. Forecast assumptions: whether Treasury publishes the model behind the $500 million
3. Project approval milestones: the Sunday Creek decision and Avonbank’s remaining permits
4. Royalty-rate settings: any change to rates or the phase-in the MCA wants

How Victoria stacks up against other states

WA remains the benchmark, with a mature mining ecosystem and an established regional programme. Queensland has reportedly cut some exploration rents to attract critical minerals activity, though the detail is not independently confirmed. New South Wales is described as having its own regional resources-funding precedent, also unverified.

Against those competitors, Victoria’s earmarking is a modest differentiator. Approval speed and fiscal stability will do more to decide where exploration dollars land.

Approval speed and regulatory competitiveness, including land access settings, are the levers explorers weigh most heavily, and industry bodies have pressed Victoria to reset policy on both.

These statements are speculative and subject to change based on market developments and company performance. Financial projections are subject to market conditions and various risk factors.

What the pledge settles, and what the election will decide

The pledge settles the principle. Labor has committed to a benefit-sharing logic that industry supports and that WA has shown can endure.

It does not settle the substance. The legal form, budget mechanism and forecast assumptions remain unpublished, and the more than $500 million forecast still sits awkwardly beside $150-151 million a year in actual receipts.

After 28 November 2026, the signals worth your attention are concrete: legislation, published design rules with outcome measures, and approval progress at Avonbank and Sunday Creek. Until those arrive, the headline is a promise, not a fund.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.