)Iron ore prices will drop at least 40%, Gladstone is now shipping less than half of what it used to ship (coking coal.) The ABC just announced that Rio is not opening some mine in Brazil etc.
I believe 5000 miners have been given the sack: with AWAs and no unions they will be unceremoniously shown the door with no redundancy pay or that gay union shit! These people have $500K-$1m mortgages, so when the decline in mining really hits the banks, local communities and the wider community via the multiplier effect will be in the shit! Government revenue will take a real hit! House prices have been inflating but that bubble is deflating rapidly.
Those tax cuts won't be repeated soon! The Depression (that is what it will be, folks) will mean no bracket creep which would slowly reverse those tax cuts. The Rodent giving people with a fair bit of income & assets and the growing unemployment will drain govt coffers which will have a helluva lot less tax revenues coming in.
Rudd is doing the right thing, applying Keynesian economics with the bonus followed by infrastructure spending. The question is, how long can a budget massively in deficit be maintained? If we can borrow the money there will be no inflationary effects yet if we can't borrow and turn to the printing press the value of money will decline quickly.
The ETS might provide a useful new source of govt revenue but in a Depression there will be less industries operating so less permits bought.
So was that mining boom good for us in the longer term or not? Or would a different government have used the proceeds of the mining boom much more wisely? Discouraging the high levels of borrowing, spending money on education, the universities etc, updating infrastructure? Hard to think of a worse govt than the last one!
