Mining Our Way To Wealth

The Age

Thursday July 24, 2008

Editing/Research Lara O'Toole, Words/Research Ruth Williams

To conclude our five-day series, we look at the key industries that keep Australia ticking.

AUSTRALIA once rode the sheep's back. Now, it could be said, we are in the tray of a giant mining truck.

Mining contributes more than 8% of Australia's gross domestic product, accounts for 37% of exports (in value, not volume terms) and, according to the Australian Bureau of Statistics, employs about 320,000 people directly or through support services.

Mining has directly contributed more than $500 billion to Australia's wealth in the past 20 years - providing untold riches in government royalties and sharemarket returns, as well as higher wages in mining states and vastly higher house prices in Perth.

Mining has helped boost GDP to about $1 trillion, which ranks us 14th or 15th in the world, depending on which body - the International Monetary Fund or the World Bank - is doing the ranking.

But it should not be forgotten that manufacturing - that much-maligned "rust-belt" sector - is still a powerhouse.

As the graphic (right) illustrates, in addition to our mining and agricultural exports, we send manufactured goods all over the world.

ABS figures show that in May 2007, manufacturing employed 1,086,700 Australians - about 10% of the workforce. In 2006-07 it contributed 12% of our GDP and it still dominates exports, despite the mining boom.

Manufacturing accounted for 51% of merchandise exports in 2006-07, and almost half of all exports.

But one look at our trade deficit shows that for all our exports, we still consume more than we produce. Of our imports, about $14 billion worth of crude petroleum, $8 billion worth of refined petroleum, and $14 billion worth of cars arrived last year, according to the Department of Foreign Affairs and Trade.

We also accepted about $7 billion worth of computers and $6.4 billion worth of medicine.

The trade deficit last year was more than $19 billion - our $237 billion worth of imports more than offset our $218 billion in export of goods and services.

The trade deficit is one of the worrying issues surrounding the economy. Although Treasury expects the economy to grow by 3.5% this year, there is bad news in annual inflation running at 4.5% - well outside the Reserve Bank's target of 2-3% - and plummeting consumer confidence.

Most economists expect a cut in interest rates by the end of the year.

DID YOU KNOW &

Australia has 84 trading partners, exporting everything from arms and ammunition to the United States to importing pottery from Morocco.

EXPORTS IMPORTS

TO BAHRAIN

Live animals

$38.5m

FROM BELGIUM

Chocolate

$37.1m

FROM BRAZIL

Animal feed

$124m

FROM INDIA

Crustaceans

$21.5m

FROM NETHERLANDS

Dairy products

$11.1m

FROM ARGENTINA

Musical instruments

$2.1m

FROM FRANCE

Perfumery & cosmetics

$202.6m

FROM RUSSIA

Silver & platinum

$56.8m

FROM

AUSTRIA

Tractors

$14.5m

FROM BAHRAIN

Fertilisers

$64.7m

FROM IRELAND

Medical instruments

$86.8m

TO GERMANY

Gold coin

$82.8m

TO HONG KONG

Computers

$33.9m

TO BELGIUM

Pearls & gems

$21.2m

TO BRUNEI

Pigments & paints

$309k

TO CHILE

Soap & cleansers

$2.3m

TO ARGENTINA

Wool

$4.2m

TO CANADA

Alcoholic beverages

$279m

TO SPAIN

Fruit & nuts

$12m

TO AUSTRIA

Railway vehicles

$1.9m

Large companies represent less than 0.4% of total companies but accounted for 64.5% of total company net tax.

2226 The number of listed entities on the ASX.

ASIC banned 110 people from managing companies in 2006-07.

Initial public offerings DOWN 42% to $6 billion in 2007-08

Australians travelling overseas for business spent $5bn in '07 $141bn in mergers and acquisition deals in 2007-08

Australia's trade in goods and services is worth $454bn

*LAUNCHED DECEMBER 26, 2006. SOURCES: ATO; ASX; ASIC; KPMG; TOURISM AUSTRALIA; DEPARTMENT OF FOREIGN AFFAIRS AND TRADE.

© 2008 The Age

Back to News Index | Back to Home