Lucky Country era ending as commodity prices set | Australian Markets

The nation’s dwelling requirements are tipped to fall over the following decade as ailing mining royalties and sluggish productiveness smashes each Australian.

Analysis by Westpac senior economist Pat Bustamante discovered mining delivered more than 50 per cent of the features in Australians’ dwelling requirements for the twenty years till 2020.

But it will come to an finish as falling commodity prices and a lack of investment from the miners themselves means Australia will no longer be the “Lucky Country.”

“Without change, Australians are in for a period of anaemic growth in living standards over the next decade,” Mr Bustamante wrote in an financial be aware.

“This will cost the average Australian $75,000 in income over the next decade.”

While dwelling requirements shouldn’t be a direct measurement of how a lot each Aussie pockets, it does give an indication of the income accessible to each nation’s resident by dividing whole income by whole people.

Mr Bustamante mentioned the contribution mining had made to Australians’ dwelling requirements had been primarily pushed by rising export prices with iron ore which soared in current many years.

But Westpac says the price of iron ore which is round $US103 a tonne at the moment will slide to $US84 by 2027.

“And while we don’t all ‘work in the industry’, we benefit indirectly from the demand for ancillary services, the investment undertaken by the industry, including in infrastructure like roads and ports, and the tax paid by the industry,” he mentioned.

“Indeed, a large reason why the federal government and the mining states have been able to provide cost of living support, and increase the scope of public services, without becoming heavily indebted is because of the windfalls provided by the mining industry.”

But Westpac warns mining investment “stalled” in post 2008 and one other commodities super cycle is unlikely to happen.

Despite the warning, Mr Bustamante mentioned Australia might offset the falling commodity prices if there’s an uptick in productiveness.

“Even without the ‘free kick’ from mineral export prices, productivity and growth in living standards can be put on a sound trajectory,” he mentioned.

“But this requires changes in business practices, policy and culture, which will allow us to benefit from the technological advances already happening and in train.”

Treasurer Jim Chalmers has recognized bettering productiveness as a main focus for the Albanese authorities’s second time period.

Mr Chalmers will host an financial reform roundtable on August 19 to 21 to take a look at bettering productiveness, enhancing financial resilience and strengthening finances sustainability.