Hoocoodanode? Booming commodities, busting economy


Nowhere on Earth is economic mismanagement so pervasive as it is Canberra:

Preliminary estimates for January indicate that the index increased by 2.3 per cent (on a monthly average basis) in SDR terms, after increasing by 3.2 per cent in December (revised). The non-rural, rural, and base metals sub-indices all increased in the past month. In Australian dollar terms, the index increased by 2.9 per cent in January.

Over the past year, the index has decreased by 10.4 per cent in SDR terms, led by lower thermal coal and liquified natural gas prices. The index has decreased by 7.1 per cent in Australian dollar terms.

How did Australia become so inept that huge price rises in its external sector resulted in huge falls in living standards?

Very simple.

If you allow global mining to gut the tax and royalty take on your commodities while gouging you for the same.

And you diminish per capita returns by pursuing breakneck population growth versus a fixed endowment of dirt.


Then Australians will get poorer.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.