In political strategy the first question to ask is: what’s next?

In other words, if we do something, what happens next? You’d be surprised how often the more populist end of the political spectrum fails to ask this.

Looking at the State Government’s mid-year Budget update that question is the one that has to be asked because the glaring outcome from the report is that we are running out of cash cows.

The fairness or otherwise of the coal royalties issue has been well traversed, but where would be without the $9.2 billion coal royalties will deliver on top of the extra $5.8 billion last financial year and the $15 billion the year before? That proverbial creek where one needs a paddle is the likely answer.

The industry believes the forecasts are way off and claim Treasury will collect $12.8 billion this financial year and Westpac has a forecast for metallurgical coal of $US300 a tonne to mid-2024 and $US250 a tonne to the end of 2025. That means another six months of boom and another 18 months of stronger than expected royalties.

Treasury’s conservatism isn’t unusual – the reason being that to be more optimistic about royalties could mean politicians spend the money before they get it.

The real issue is not just how much money is being generated by coal, but what do we do as a state when coal is no longer the cash cow and whether what we are exporting is really acceptable?

It doesn’t seem to be an issue too many want to discuss because they believe metallurgical coal, which makes up about two-thirds of exports, has decades of life. Maybe it has, but certainly less for thermal coal. Sooner or later, either domestic or international politics will force a response, even for metallurgical coal.

We saw it in the push at last week’s COP meeting in the UAE where there was agreement to reduce global consumption of fossil fuels to avert the worst of climate change, signalling the eventual end of the oil age.

Climate change minister Chris Bowen says there was a clear message sent from the summit that “our future is in clean energy and the age of fossil fuels will end”.

AEMO has also said our own coal fired power plants are likely to close in 15 years.

We can only go on kidding ourselves about coal for so long.

The thing is, the mining industry has been successful in arguing that metallurgical coal is necessary because it’s used in steel production. If that’s true we are willing to accept emissions and all that comes with it for for steel, but not for energy.

It seems we have been hoodwinked there.

Either way, Queensland has to ask what’s next? We have to have a serious discussion about how we replace coal revenue because it will takes decades to make the transition to another export that delivers the same sort of financial benefit.

Hydrogen is a possibility but it seems such a long way off.

Other eyebrow raising elements of the Budget update included the income from tax revenue which was expected to grow by about 6 per cent a year over the next three years, partly because of real estate transfer duties and land tax, but also because of a growing economy.

So, booming house prices and coal royalties appear to be underpinning the Budget.

Dwelling investment was also expected to rebound this year.