Australia’s resource boom will endure even after commodity prices peaked, as greater capacity and increased shipments support economic growth, Treasurer Wayne Swan said.
Investment in mining and energy projects “still have some way to run,” Swan told the Australia in China’s Century conference in Sydney today, according to a text of his speech. “We are also beginning to see its lasting benefits -- greater economic capacity that will continue to boost our export volumes in coming years.”
Australia’s economy grew about 4 percent in the first half of 2012 from a year earlier on the strength of resource-industry investment and consumer spending. Still, a plunge in the price of iron ore, the nation’s biggest export, and a rising currency prompted mining companies including BHP Billiton Ltd. and Fortescue Metals Group Ltd. to put off projects and cut jobs in the past month.
“It now seems likely that 2011 marked the peak of Australia’s commodity price boom,” Swan said. “I say this because demand from China was never going to sustain rapidly rising commodity prices forever, or supply an ever-lasting source of income growth.”
China, Australia’s biggest trading partner, expanded 7.6 percent in the second quarter from a year earlier, the slowest pace in three years, as exports faltered and after the government moved to counter inflation and surging property prices fueled by the 2008 stimulus.
“China’s return to pre-eminence in the global economy is the most momentous development since the industrial revolution re-shaped the Western world over 200 years ago,” Swan said.
In his speech, Swan referred to a policy blueprint the government is preparing on the country’s relationship with Asia through 2025.
“Within our lifetimes, for the first time in our modern economic history, Australia will not share a political system, a cultural heritage, or language, nor a similar level of development to the world’s largest economy,” he said.
Swan said last year’s census showed Mandarin has overtaken Italian since 2006 as the most common non-English language spoken at home in Australia, and Cantonese has passed Greek.
“Our success will be in part shaped by our capacity as a nation to eschew and denounce the types of xenophobic claptrap we’ve heard from various very prominent public figures lately,” Swan said, referring to criticism from some lawmakers over Chinese investment in Australia.