How the mining boom juiced the economy (members)

By Leith van Onselen

The Reserve Bank of Australia (RBA) has released a new paper attempting to estimate the impact of the mining boom on Australia’s economy. The broad impacts are best summarised in the below chart:

The mining boom is estimated to raise household income through several different channels… As of 2013, the population is about 1 per cent larger than in the counterfactual, reflecting the response of net migration flows to relative job opportunities and higher real wages. Employment is 3 per cent higher, largely due to the boost to aggregate demand. Real consumer wages are about 6 per cent higher, reflecting the effect of the higher exchange rate on import prices. A larger tax base leads to lower average tax rates, which help raise household disposable income by about 13 per cent. Household income is also supported by higher property income, reflecting higher wealth, in turn attributable to higher equity prices and higher saving. Capital gains would boost broader measures of income, though not the national accounts definition.