Australia’s economy will remain resilient as the mining-investment boom peaks, with increased exports and a pick up in other industries supporting growth, the nation’s new Treasurer Chris Bowen said.
The economy “will begin to return to normal” in the next two years, Bowen said in a speech to journalists in Canberra today. The transition “will be challenging,” said Bowen, a key backer of returned Prime Minister Kevin Rudd.
Rudd and Bowen are seeking to reframe the economic debate by highlighting the risks from a Chinese slowdown and spending cutbacks if Tony Abbott’s opposition wins power in elections due by Nov. 30. Predecessors Julia Gillard and Wayne Swan saw their credibility dented when the government abandoned a pledge to return the budget to surplus last fiscal year.
“Who is best placed to manage and engineer this transition will be a key battleground –- the key battleground in this election,” Bowen said. “Our challenge is to manage this transitional period. From the mining investment phase to the production phase, from resources investment to investment in services, manufacturing and clean energy. We need to ensure this is as smooth as possible and the bumps are minimal.”
Australia’s relatively strong economic performance is expected to continue, Bowen said, with growth over the next two years expected to exceed that of advanced economies as a whole.