This is what’s meant by the resources boom; export income is pouring into the Australian economy at unprecedented levels, thanks to the higher prices for coal, iron ore, gas, copper and other commodities.
The surge in cash is generating a record trade surplus for the country, and again shows the falsity of the campaign against the Rudd resource rent tax from the mining industry, the federal Opposition and sections of the media.
It also underlines the weakness of the Gillard government’s watering down of the tax.
Much of this surge in national income won’t stay here, but will be kept by the foreign shareholders and managers of Rio Tinto, BHP, Xstrata, Anglo American, Peabody Energy and a growing number of Chinese investors.
Australian Bureau of Statistics figures this morning show that Australia recorded its largest ever trade surplus in June of $3.54 billion, almost double the revised May surplus of $1.7 billion.
Exports in June rose 7% to more than $26.67 billion in June, the second highest monthly figure on record after the $27.4 billion in October 2008 , while imports edged up 1% to $23.14 billion.
The figures mean that in the three months to June, Australia has had a trade surplus of a record $6.6 billion, a development that supports the Reserve Bank’s belief that our terms of trade are at record levels last seen in the boom in 2008 that was once thought to have been a one-off occurrence.
The ABS said the ” sum of the seasonally adjusted balances for the three months to June 2010 was a surplus of $6,628m, a turnaround of $9,921m on the deficit of $3,293m for the three months to March 2010.
“However, if the seasonal factors used in compiling quarterly Balance of Payments are applied, the June quarter 2010 surplus was $6,497m, a turnaround of $9,706m on the revised March quarter 2010 deficit of $3,209m.”
The impact of the June quarter surge showed up in figures for the 2009-10 financial year.
The ABS said the trade deficit for the financial year was just $6 billion, down a massive $11.9 billion on the surplus reported in 2008-09 of $5.9 billion. A year ago such a dramatic improvement seemed implausible.
We can expect monthly surplus of $1.5 billion to $2 billion for the next few months, even though iron ore prices are expected to fall sharply in the September and December quarters.
I’m glad to enlist the author as openly and honestly onside with my team campaigning to keep us nice by having others do our stealing for us. Though we get dividends from mining company profits, just like the foreigners the author refers to, we look forward to getting more in our superannuation if we again get a government we can trust to be untrustworthy and willing to increase the taxes on existing businesses beyond the levels charged to all corporate businesses.
Where was the author in the past decade anticipating that we might wish we were following the Norwegian example and building a really big Future Fund by making sure that, prospectively, new mining and hydrocarbon enterprises would know that they had to pay a bigger proportion of their gains at the resource extraction level if prices boomed while costs did not? It is not as though the literature hasn’t been full of bright suggestions for sharing the benefits of owning and using resources (known and still to be discovered) equitably between state and business.
By all means auction the rights not already granted, or (because of course bureaucrats assisted by journalists are really good at this) fix a price which propective miners will have to pay for access to resources – and in either case, be willing to accept that we may all be disappointed because, for example, no one bids much at auction, no one accepts the fixed prices or China’s projects in Africa turn out to leave us with much less pricing power than we hoped.