A Rich and Confident Country

About the author:

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By Michael Knox

Job title:

Chief Economist and Director of Strategy

Date posted:

26 October 2022, 7:00 AM

The treasurer's main problem is distributing the benefits of the commodities boom.

In recent weeks, I have spent much time looking at the extremely difficult issues confronting European economies. Here we see real crisis. Here we see major economies facing the strife caused by major slumps in their terms of trade. Important resources are difficult to get.

Their economies and their populations are faced by genuine hardship made worse by the approach of winter. How different it is to look at the Australian economy painted by these budget papers.

This is a rich and prosperous economy in the midst of a major commodities boom. This is an economy benefiting from a major rise in its terms of trade, precisely the reverse of the terms of trade slump suffered in Europe. The Treasurer’s greatest hardship seems to be the problem of distributing the benefits of Australia’s strong terms of trade.

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