It’s been said before but the release of the January international trade data yesterday by the Australian Bureau of Statistics (ABS) underlined again a worrying concentration of Australian exports into one market, from one state, and one commodity.
According to this data, the share of total exports to China hit an all-time high of 34% in January, streets ahead of our next biggest export market, Japan (19% share):
It was a similar story for Australia’s biggest export commodity – iron ore – which hit a near record 26% share in January:
Finally, exports from Western Australia hit a near record 52% share in January:
With the exception of South Australia, Western Australia is now single handily holding-up Australia’s trade balance. Queensland has fallen into deficit as coal has slumped:
With increased concentration comes increased risk in the event that the Chinese economy hits an air pocket and/or rising global iron ore supplies depress prices.
unconventionaleconomist@hotmail.com
Vic & NSW – unbelievable. With money-in less than money-out for so long, and with WA paying the bills all the while, is it any wonder NSW/Vic residents can’t believe their living standards are anything but normal?
BIS Shrapnel and Frank Gelber are at it again..
Debt an answer, but Moody’s hovers
BIS Shrapnel’s chief economist, Frank Gelber, briefed bureaucrats about the problem in October last year at an interdepartmental forum hosted in Melbourne by Victoria’s Department of Planning and Community Development….
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and at the October meeting Gelber’s advice was simple. The government should seriously consider increasing debt to finance quality infrastructure expenditure, he said – to support jobs and activity in the near term, but also to support medium-term growth and boost productivity.
I am sorry, but building desalination plants and prisons with mismatched doors/window sizes isn’t going to boost productivity nor help in long-term job creation. How the hell is this sh!t reported in the MSM as a noteworthy piece of sound economic advice?
What riles me up even more is that these #$!@!% “consultants” get paid taxpayers money to “advice” and screw the taxpayer over with even more debt.
Jeez. Gelber?
Yeah, that was my thought when I read the article.
Somewhere in a box I have a load of old economics notes and textbooks stuff dating from the early 1980s which banged on about the need to have some part of the economy develop skills, some part of the economy to be globally competitive, and of the usefulness of doing something complex in an economy as this tended to bring in greater value. Might dig those out again.
What for?
We are a high cost economy (see land, labour and electricity prices compared to the world).
Few industries can survive this high cost landscape. I don’t blame mining for these problems. I blame Canberra.
Specialisation
On a more serious note, ironic that the very sector that has been such a boon for Australia in recent years simultaneously, because of the nation’s dependence on it, presents dilemma should the boom unwind in a disorderly manner.
If disorder is of the day we will experience economic challenges similar to some in the Eurozone.
Of absolute challenge is to develop over time an economy that is more robust to volatilities and deeply competitive in a globalised economy.
There appear few ideas on the latter.