Mining Helps Australian Economy Expand
December 21, 2015
The Australian economy grew by 0.9 percent in the quarter that ended in September, bringing year-over-year growth to 2.5 percent. The growth was due to exports in goods and services, which were up 4.6 percent, and mining exports, which grew by 5.2 percent. Private investment fell by 2.9 percent, and public investment decreased by 9.2 percent. Overall growth for the second quarter was only 0.2 percent.
Although the resources sector continued to perform strongly, investment in mining has dropped to 4.5 percent of gross domestic product. Investment in the non-mining sector was 9.7 percent of GDP in the third quarter of 2015.
Australian Treasurer Scott Morrison said the economy is strengthening and heading in the right direction. Employment is growing at the fastest rate in five years, and workforce participation is also increasing.
Morrison said the Australian economy is in transition. Rather than replacing services for mining, the economy is broadening and diversifying. Growth has been particularly strong in New South Wales and Victoria. The prime minister is focusing on cities to drive economic growth, a strategy that Morrison supports.
The Greens are concerned that Australia’s growth is too heavily tied to mining exports. They believe that leaves the Australian economy vulnerable to changing prices and demand. They want to continue to grow the economy and make Australia a renewable energy superpower.
Labor said the economy is not performing as well as it could. They said that without strong mining exports, the economy would have struggled to grow. They predict that the economy will struggle to replace losses due to declines in mining investment unless there is a significant increase in non-mining investment.
Morrison downplayed the significant decrease in public investment and said it was too early to draw conclusions about the change. He also criticized Labor for its goal of reducing emissions by 45 percent from 2005 levels by 2030, saying it could harm the economy and cost jobs.