RESOURCE ACTIVITIES OF
the past decade have underpinned
significant improvements to Australia’s standard of living,
according to a report on the impact of the ‘mining boom’ by the
Reserve Bank of Australia.
In its research discussion paper,
The Effect of the Mining
Boom on the Australian Economy
, the Reserve Bank compared
the economic outcomes of Australia’s mining investment surge
against projected benefits had the mining boom not occurred.
“The world price of Australia’s mining exports has more than
tripled over the past decade, while investment spending by the
mining sector increased from 2 per cent of GDP to over 8 per
cent,” the report reads.
“This ‘mining boom’ represents one of the largest shocks to
hit the Australian economy in generations.”
The research, which circulated primarily around the
overarching impact of rising commodity prices, found that
income, wages and employment rates had increased as a result
of resource investment.
The increases of income, combined with the improved
exchange rate associated with the mining boom, led to higher
purchases of household goods, food and communications.
“By 2013, we estimate that the mining boom had raised real
per capita household disposable income by 13 per cent, real
RESOURCE INVESTMENT BEHIND
higher living standards
wages by 6 per cent and lowered the unemployment rate by
about 1.25 per cent,” the RBA says.
“The combination of the substitution and income effects mean
that motor vehicle purchases may have been 30 per cent higher
as a result of the mining boom, and durables 25 per cent higher.”
Additionally, those who have bought into mining shares,
including through superannuation funds, are said to have
benefitted most from the mining boom.
However, the report also notes that other industries had
experienced a slight downturn coinciding with the ramp-up of
resource investment from 2002.
“The combination of changes in income, production and
relative prices [associated with the mining boom] has meant large
changes in the composition of economic activity,” the report says.
“While mining, construction and importing industries have
boomed, agriculture, manufacturing and other trade-exposed
services have declined relative to their expected paths in the
absence of the boom.”
RP
JSD02682
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RESOURCE
PEOPLE
SUMMER 2014-15
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ECONOMY & FINANCE
