A report released by budget forecaster Deloitte Access Economics sent a chilling warning to Australia’s heads of finance: the mining boom, responsible for propelling the nation through the GFC and beyond, will come to an end within the next two years.
Though the prediction does not pose an immediate threat to Australia’s economy, The Australian noted that Treasurer Wayne Swan will have quite a lot of decisions to make before providing a budget update in November.
''If it shows this year's forecast $1.5 billion budget surplus is no longer there, he will have to decide whether to cut again in order to continue to forecast a surplus,” said Access director Chris Richardson to The Australian. “The risk is the cuts will hurt. The window dressing in the May budget was designed not to hurt.”
SEE RELATED STORIES FROM THE WDM CONTENT NETWORK:
A drop in the market prices of iron ore and coal, two of the nation’s biggest commodities, is having a big impact on the national budget outlook in connection with the report.
“The budget is more exposed to commodity prices than it used to be. They drive profits, which [drive] company tax, but they now also drive takings from the minerals resource rent tax,” said Mr Richardson.
However, Business Spectator reported that a decline in mineral prices has already been factored into the economic budget and that Trade Minister Craig Emerson is confident in the security of the nation’s well-regarded global economic stance that just passed 21 years of consecutive growth.
"We are returning the budget to surplus," he reportedly told ABC Television.