How Did The Mining Boom Affect The Australian Economy

Traditionally Australia’s economy was very agriculture orientated, in the 1960s 62% of total exports were agriculture products, in the 2000s it accounted for less than 3% (Lewis). Australia has remained the only country of the developed world to avoid a recession for twenty three consecutive years (Smyth). Their economy has made some dramatic changes; the transition from agriculture, mining, manufacturing, and service has caused stress and prosperity on the Australia economy. The recent mining boom end has required an intense shift in the economy.
According to “The Effects of the Mining Boom on the Australian Economy,” the mining boom was one of the single largest shocks to ever hit the Australia economy. The mining sector increased a total

The mining boom had been elevating for the past decade but reached its peak in 2013, since then it has begun to fall. For the past two decades the mining boom has helped to carry the Australian economy from ever reaching a recession, expansion had remained steady and unemployment almost nonexistent. Australia’s economy is the only one of the developed world to not have true recession in the past 20 years. In 2001, Australian mining exports accounted for about 21% of the country’s GDP (Lewis). Although in the past three years coal prices have been cut in half (Smyth). Since the 1980’s this has been the biggest crash in the mining and oil industry. The sectors prosperity was driven by China’s demand for Australians natural resources: coal, natural gas and iron ore (Smyth). Because of the recent mining crash it has caused a “budget emergency” for Australia. The mining boom had allowed government to decreases taxes, making Australia’s “income taxes one of the lowest of the industrial world (Smyth)” at 27.4 percent in 2013. The boom in natural resource exports led to an increase in wages and high prices for goods and services. In 2013 Tony Abbott, a conservative, was elected as Australia’s new Prime Minister, has plans to keep the economy on track. Even though he plans to “re-boost” boom, a large infuses is going to be placed into other

Government spending has increased rapidly. The reserve Bank of Australia has deceased interest rated to a record low of 2.5 per cent last year (Smyth). Although the mining bust has set Australia’s economy onto a rocky road the economy has not hit a dramatic recession yet. Robert Rennie, West Bank’s global head of commodity strategy predicts a 3 per cent growth in GDP for 2015. China has been one of Australia’s main exporter for natural resources, but now Australia must remain somewhat dependent on China for their other exports. Now that the mining boom is over the other sectors of the economy will have to pick up the slack for the missing natural resources export profits. Due to the offset of the end of the mining boom manufacturing has also declined, but investment in other industries has increased by 4.9%