From the AFR:
Treasurer Joe Hockey, whose budget hopes are being smashed by falling iron ore prices, has backed a decision by Australia’s biggest miner to curb production of the key export.
Mr Hockey said “common sense must prevail,” while he was also pleased to see exporters were “taking a more reasonable approach to production levels”.
“Obviously the price of iron ore will have an impact on our budget and we expect our producers to behave in a mature fashion,” Mr Hockey said.
As a commodity-dependent nation we have some pretty commodity-ignorant people in charge. BHP has just made the glut far worse by:
- boosting short term prices, which has
- helped FMG gets its bonds over the line, which ensures
- much lower prices for longer, and
- has handed a weapon to the political push that thinks the iron ore price can be supported by supporting high cost producers.
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Amazing to watch.
