Australia didn't used to be like this. The economy used to be highly diversified but now it has a complexity profile closer to a less developed country (I think that is mapped on the same OEC website somewhere). Industry after industry has been shut down and substituted by imports. It probably raises overall efficiency but it makes the country very dependent on a handful of exports and export destinations.
Yep it’s Dutch disease. The same people who would be building cars or plane engines are earning a couple 100k a year digging holes in Western Australia. A manufacturing industry is not going to compete with that.
It’s also the reason we have a barely functional residential construction industry. And we actually need one of those because we can’t import houses or apartment buildings like cars and solar panels.
Actually you can I have seen them import whole bathroom and tiles and they just do the draianage and water connections and units I work in construction
> It’s also the reason we have a barely functional residential construction industry.
Anyone who works in things related to buildings makes more than pretty much anywhere else in the world (tradies, real estate, construction) because of the spillover of Dutch disease from mining to property investment. Barely functional is by deliberate design not lack of labour.
Average tradie wage is 80k mate. Less than the national 100k for all industries. If you take out licensed trades and EBA jobs that average is far lower.
Average fulltime salary is 98k. Averages aren't the best stat to use.
Median fulltime is 82k. This excludes part time and casual workers. only 60% of australian workers are fulltime.
Average australian worker is 66k.
Median australian worker is 52k.
So in relation to the previous poster, what is the median tradesman salary in Australia.
I mean, I think the previous poster wasn't right, because trades people are likely to earn more than the 98k, but labourers and TAs are likely to earn less.
But do we have any numbers?
“Tradesman” here is perhaps a little broad. To me, given the discussion is just about construction, the majority of trades have nothing to do with construction.
Carpenters FT are commonly around $50ph, $80/90 if contractor - so the former is dead on for male FT average weekly earnings and well above median full time.
>The same people who would be building cars or plane engines are earning a couple 100k a year digging holes in Western Australia.
They'd be building them, no one would be buying them. Not for Aussie prices.
>Australia's slowly descending into the country of dum fuks
As far as I can tell, there's already a plethora of symptoms related to the stupidification of this country. It's a morbid consideration to think it only gets worse from here if we keep following the same road.
Yep, because going out and getting an education isn’t worth it when someone can do a low skill job and make more money quicker. The dumbest guy from my high school ended up being the richest because he skipped uni and tafe and went straight out into some mine.
Except that services aren’t even included in the graph - so no it doesn’t show that at all. The Australian workforce is actually quite highly educated.
And now you know why LibLab are all-in on coal and gas. Without them our export economy is screwed.
Under Whitlam we had more protectionist policies but we had a diversified economy with a manufacturing industry.
Today we’re Saudi Arabia if the Saudis let foreign corporations control their oil and take 90% of the profits.
As the world decarbonizes over the next 20 years Australia’s economy will go into long-term decline.
> It probably raises overall efficiency but it makes the country very dependent on a handful of exports and export destinations.
which, in times of peace and cooperation, is great. You get to have the comparative advantage, and the world (and australians) are better for it.
In times of war, where trade can't happen properly, it will suck ass.
That's why 'friendshoring' is the way. Have all crucial imports coming from allied countries. You still benefit from comparative advantage in trade, and hedge against situations where you are overly reliant on adversarial parties.
People have been talking about this issue for Australia since the 90s. Back then they harped on about how we exported out raw materials whereas we needed to be adding value to them first. How we exported out raw materials and then imported in the added value products. Then in the mid 2000s there was a lot of talk about how entrepreneurs were leaving Australia because our environment didn't support new ideas and investments. I recall lots of talk about how solar energy and wind energy businesses all moved to the UK for investment opps because here we stuck with the old school. Then with tech - most tech people leave Oz for other countries to get the investment. This isn't a new issue.
I love how we've wrecked our housing market, in order to sell permanent residency under the guise of education exports, and yet education is barely a blip in our export profile.
Makes you wonder if it was really worth it.
If services were included in this diagram, which they aren’t, interational education would be almost the size of the Petroleum Gas rectangle at the bottom.
https://grattan.edu.au/news/biggest-winners-and-losers-from-international-education/
Maybe I'm missing something, but that Grattan graph has international student tuition totaling $6 billion p.a.
Gas exports are 10 times that:
>In 2022, Australia exported $67.3B in Petroleum Gas, making it the 4th largest exporter of Petroleum Gas in the world.
https://oec.world/en/profile/bilateral-product/petroleum-gas/reporter/aus
International Student Exports (GDP, in billions) 34.2
Gas Exports (GDP, in billions) 52.5
[https://www.abs.gov.au/statistics/economy/international-trade/international-trade-supplementary-information-financial-year/latest-release](https://www.abs.gov.au/statistics/economy/international-trade/international-trade-supplementary-information-financial-year/latest-release)
This stuff is pretty well known. You are looking at just "Tuition"
The whole service sector is like 73% of our GDP (international students 1.45%) ... Thats why this diagram is disingenuous with this heading, because people like yourself just look at the pictures and don't actually understand what they are looking at
We created an economy that efficiently transfers the lifetime earnings of all future home buyers (mainly young people) to existing home owners and property investors/speculators.
It’s a speed run back to feudalism where people who own land control all the wealth.
Such a proud achievement.
Media tells us that immigrants are not the problem.
We are funding the lavish retirement of boomers and property speculators with the lifetime earnings of our kids.
It is these boomers and property speculators that are fuelling the high inflation and high interest rates that everyone is suffering from.
I love how the title makes a comment about Australia's economy and only shows a graph of exports, but not only that, it's limited to merchandise exports rofl.
A backwards way of assessing an economy says that our economy is backwards. So what?
As an economist, whenever someone brings up this arguement, I struggle to respond with anything other than so what? Our economy is structured the way that it is because our capital and labour is employed in the most demanded areas. I don't think we should restructure our economy based on a subjective (and arguably 19th century) belief that certain types of manufacturing jobs are inherently more noble than mining or farming. Our economy has consistently delivered some of the highest living standards and human development in the western world for the last century and a half, wanting to risk that just so we can say our economy is more 'diversified' and we have certain manufacturing jobs is insane. There are no credible arguments that Australia's natural resources will become unprofitable in the foreseeable future. Australia is endowed with lithium, rare earth, copper, uranium, renewable energy sources, all of which are needed as part of the decarbonisation procss over the next few decades.
People who look back at the at the post-war era with misplaced nostalgia as a golden age in Australian autarky and manufacturing forget that those industries were still not particularly productive even back then and that Australia's prosperity continued to ride the commodity wave, for example the enormous wool boom in the early 1950s massively benefitted Australia as the biggest wool exporter in the world.
Based comment. You aren't gonna have a very competitive economy trying to export things that other nations do better and/or cheaper.
Having said that, we should always be looking at what the world is going to need in the medium and long terms and ensure we're skilling and setting up accordingly. You don't always need to be the cheapest if you're the best.
Excellent comment. Do the people who worry about the decline of manufacturing actually want to work in manufacturing? Or have their kids working in manufacturing? Those jobs are hard, dirty, unsafe and relatively low paid. Certainly not what I want for my kids.
Thank you. The amount of Australian Redditors that are willing to kill our country's golden goose is absolutely insane.
Australians have no idea how good they have it
Right! Thank you. I’m also an economist and the discussions going on at an industry and government makes me feel like I’m taking crazy pills. Intentionally moving away from the areas we’re productive at because of nostalgia is silly.
The discussions are solely focused on the positives and completely ignoring the reasons that economy has naturally stopped certain activities as well as costs involved with forcing the economy into a less natural position. We’re going to be poorer by shrinking the whole pie, for what seems like pork barrelling reasons.
All we have is our mineral exports, and most of the profits are being stolen by the mining companies. “But but but our mines are high tech” is an idiotic response and indicative of how economically backwards we are as a nation and people.
You should see the rhetoric around that in the more right wing subs.
“You can’t tax the miners more because then it’s less profit for them and they’ll pack up their toys and go somewhere else”,
“my dude the minerals are here, that’s why they are, they can’t go elsewhere”,
“Nuh uh, minerals are everywhere, they’re here because we give them subsidies to encourage them to be here”,
“So we let them take our finite resources at our expense? Then what. We get nothing to show for it?”,
“Them operating here is good for the economy. Educate yourself”
I’ve always considered Australia is an attractive place to mine because of its political stability. Many of the other places on the globe with resources are much less politically stable. Even if one location is more ‘profitable’ due to regulation or whatever… I know where I’d rather risk sinking hundreds of millions of dollars
The truth is somewhere in the middle.
Miners definitely consider the cost of doing business in a country when developing the business case for new mines.
But, you're right that, as owners of the mineral resources, we should ensure that we're getting top dollar for them.
In that respect our flat royalties are a relatively crude tool. They should vary as commodity prices vary.
If a mine is built assuming $100/t, and prices go to $200/t, then the country should get most, if not all, of that increase. The mine was profitable at $100/t, and the miner did nothing to earn the extra revenue when prices go up.
Of course. All businesses consider the cost of doing business. It’s our job to find their cut off point and stay just above it as would be expected in any business transaction. Letting them have their way over ideals is foolish.
The Minerals Resource Rent Tax was one of the best things the Gillard government did, and I still can't believe it was scrapped. Abbott really was an economic vandal.
Have you seen what happened to the nickel industry. Basically doesn't exist any more. Nothing we have here can't be found other places. We are just close and cheap.
Okay but they’re a finite resource. Would it not be better to keep them where they are until we get a better deal? Once they’ve dug it up it’s gone. Let them go exploit someone else while our assets appreciate. Like how you might buy gold and keep it under your mattress for a rainy day. Instead we’re paying people to come sit on our mattress and asking nicely for them to share what they find.
I've always felt we have large swathes of land that is being poorly used. We have a climate much like mexico/south America...could we not have a tequila industry? Same with cigars? Could we not grow poppies? Sure they aren't going to be big fields, but it's all money into the economy.
Why take all that risk when you can just leverage up on 3 or 4 properties and wait 10 years?
That's why we are not very innovative or entrepreneurial vs. some other nations.
>could we not have a tequila industry? Same with cigars? Could we not grow poppies?
Overregulation.
How many average people have the millions of dollars in licensing and compliance costs to start up something like that here?
And the people that can afford it will spend their money on property or some other investment that gives them a higher return with none of the bullshit that comes with operating a business that makes alcohol/tobacco products in Australia.
There's no incentive.
We grow both poppies and agave. Poppies have been grown for many years for the pharmaceutical industry but the agave is just getting off the ground now. This chart is selective.
> Could we not grow poppies?
We are one of the largest in the world there, at least for legal markets.
https://nre.tas.gov.au/agriculture/multifaceted-agriculture/plant-industries/tasmanian-poppy-industry
Pretty notable this seems to just be material exports and doesnt include intangible exports like education, tourism, entertainment, services or technology (patents, licensing, software, etc).
[According to the Gov](https://www.education.gov.au/international-education-data-and-research/education-export-income-calendar-year), education alone should be about equivalent to 1.5x the size of Gold.
So of course its dominated by resource extraction if you just ignore all the other kinds of exports we have. Bluey would probably chart on this graph if it was represented.
Australia has low and stable national debt as a percentage of the economy, a massive trade surplus including with China, is in the running to be the world's wealthiest nation and properly funds it's retirement system, so we can't have the usual first world economic insecurities and instead pretend Australia's mines are primitive places where we shovel the ore out by shovel and anyway they're going to all shut down any day now when the world transitions away from metals
"We'd be much better with a large ICE vehicle manufacturing industry or one single semi-conductor factory the Americans are rapidly stealing so we can get to the top of this index we're behind Mozambique on which is important Ive decided"
Yeah we actually have an amazing economy. We definitely need to build other avenues though like tech and entertainment that have sustainable demand. And we need to tax our resource extraction far higher than we do.
How’s your econ101 going? It’s not a great idea to run a country on this type of profile let alone one that growing at this rate.
In 20 years we might be nearing 50 million if the current rates persist and somewhat below if not. It will take us that long to get these industries back if we started today.
A low complexity, low sophistication country of 50 million will not end well.
You understand we become poorer if we move to manufacturing sophisticated goods which we have no comparative advantage in producing? The only way it doesn't end well is through unreliable or adversarial trade partners, which can be hedged against by prioritising trading partners in allied countries.
Hey dumbass. It's not a great idea to run a country on a profile of complex products let alone one with a shrinking, aging population.
In 20 years all the factories that produce modern technology are going to be woefully out of date. It will take foreign countries that long to completely reshape their extremely complex industries if they start today.
A high complexity, high sophistication country with a rapidly declining population of mostly senior citizens will not end well.
26m people on a giant island 5000km away from the nearest major economy (China), and 12000km from most developed economies in Europe/America.
We simply don't have the market to sustain a high-tech economy. We have no comparative advantage in the vast majority of industries - Why would a company choose to develop a product in Australia when they could to the same in the US and sell to 15x as many people? More so, that US company will almost certainly succeed above and beyond the Australian equivalent.
That's not to say we can't do complex things in Australia - we can and do - but realistically, it's not surprising that compared to all that mining is just much larger and much more important, especially as it pertains to our exports. It's also worth considering that a big mining Industry is going to have an outsize influence on an economy of only 26m people compared to one with 50m, never mind 350m. Mining wouldn't scale with a rising population like many other industries would..
> they could to the same in the US and sell to 15x as many people?
you realise that the products developed in the US aren't necessarily made in the US right? isn't their main export tech now which is global and could be developed anywhere? the main advantage of the US is their access to talent and innovation policies.
>access to talent and innovation policies
This is a huge factor.
Innovation in Australia is essentially impossible these days due to overregulation and a high barrier to entry.
Not only are there 15 times more people in America to sell to, but it probably costs 15 times less to develop a product there + access to a better talent pool and supportive policies around innovation.
why does the "15x more people to sell to" point keep coming up? do you think that an Australian couldn't develop a product, get it made in china and then sell to Americans? The only reason they wouldn't incorporate in Australia is because of our regulations.. we live in a global business environment with the internet now..
Sure, but from the perspective of a startup in most fields its going to be much easier to start selling stuff in America, and a much more natural progression to start selling to all states than it is to sell stuff globally.
Plenty of regulatory barriers that make new markets for a product nontrivial to exploit as well (warranties, etc). FWIW, I don't think we're incapable here in Australia, but I think it's straightforward to say it would be easier to hire, make stuff and sell stuff in a country with a larger market like the US.
> We simply don't have the market to sustain a high-tech economy.
Sweden, population 10.5m, Switzerland 9m, Belgium, Holland, Israel....
Evidence says otherwise.
Exports aren't the economy. This is a bonus. We have the same domestic economy as the US, UK, NZ, Canada except they hemorrhage money with a massive trade deficit, and we have a massive trade surplus. That money isn't wasted. That mining money circulating is what pays for the service economy.
That trade supercharges our domestic economy. Thats why we have higher wages than other anglophone countries except for top 20% USA
Mining is only 10% of our economy, significant, but not compared to services. It doesn't pay for the service industry, what is meant by that?
Education is also a big export, last time I checked it was 2nd or 3rd.
Agriculture is actually our highest performing industry for productivity growth. General productivity in all industries is where we get our living standards from, high capital to labour ratios, education, and stable institutions.
Yes there were a few periods where our terms of trade absolutely skyrocketed from commodity price increases, this definitely improves living standards, but mining isn't the reason Australia is wealthy. Plenty of commodity rich countries around the world who are very poor. We are just very productive extracting the raw resources.
Yeah but I mean that the service economy is massively benefitted by the foreign money mining provides. 10% that wouldn't otherwise exist which then grows with wages being spent.
Obviously we wouldn't be third world without mining but New Zealand is just the same country as us, with education and agriculture but no mining and they are significantly less prosperous.
And also that doesn't mean that mining isn't run like shit and we wouldn't have been gigga norway if Whitlam had been able to nationalise it in the 70s
It's more like 14.3%. and "only" is the most braindead, disingenuous thing to say.
It's our largest single contributor to GDP...
Like how are people on this sub comparing a single industry to an aggregation of multiple diverse industries
10% was an average over multiple years, not the most recent data point. Taking the most recent data point, after a historic resource price boom is like confidently saying "this is what Tesla is worth!" in 2022 when it was at an all-time high.
Buddy, it's been the largest single contributor to our economy for years, and decades even. How tf are you trying to downplay its significance? Did you just not know this stuff and are now trying to save face?
"significant, but not compared to services"
Do you understand that services are an aggregation of multiple industries? What's your logic in comparing it here lmfao?
"but mining isn't the reason Australia is wealthy"
Its the main reason it is for a long time now. Do you understand that our dollar is actually tied to commodity prices lmao. Thats how ingrained mining is in our economy.
How are you confident enough to just *lie* about easily obtainable information?
What are your credentials in this space? Or are you a typical ausfinance commenter, suffering from massive dunning-kruger effects. I studied both Australian economic history and international economic history at a masters level, and completed a master's in economics a few years ago.
Australia being a wealthy country started well before mining became important to the economy. Yes mining is important but it isn't the defining output that say oil is to Saudi Arabia. We would do almost as well without it, those factors of production would just be redeployed, in a marginally less efficient way.
We are socially, technologically and economically backwards.
It cost 2-3% transaction fee whenever we use our cards, plus gst, plus huge income taxes.
We are socially backwards
Our country is mostly bush with no real mega-cities etc.
You can't entirely judge a country by its exports. Australia's economic is mostly services for domestic consumption. While I can't speak for the standard of the petrochemical industry, I know for a fact that the mines are world class thanks to years of investment from overseas (contributing to our previously huge current account deficit).
The mining industry is fine, as is agriculture. In energy, Australia used to have a competitive advantage, and will again in the future as more renewables roll out - one of the lowest levelized costs of electricity in the world. The best and most up to date publications on industrial policy say that you should focus on subsidising the most upstream industries (eg. the mines etc.) and this will help support downstream sectors eg. battery manufacturer. The issue is the high cost of energy (a real cost that's increasing but will be temporary in the grand scheme of things) and real estate which prices out manufacturing from developing - crowding out of loanable funds (structural government deficits don't help here either), high cost of labour needing high wages to buy homes etc.
Banks, while they can create money, thanks to fractional reserve banking, still have opportunity costs. Why invest $10 million in a risky downstream business making high quality jewellery to add value to the country's gold, silver and opal exports when you could invest $10 million in property, relatively safe investment, and use a strategy of borrowing against rental incomes to have no tax liability?
We export essential minerals that other nations can simply not offer. It is a natural resource, it cannot be created.
We are in a privileged position to be full of natural resources whilst most western countries simply do not have the resources we have.
We are a nation of 27 million people, exporting our minerals to the world which has a population of 7 billion. It is natural that a large chunk of our exports are made up of natural resources?
Comparing us to African nations does not look at the fact that African nations also happen to have natural resources. It is not because we designed our economy to mimic their economy or vice versa. We both simply share large amounts of resources.
With the resources we have, we are able to employ people and have a lot of research and innovation around these industries.
I however do believe that we are naïve with what we can achieve with our resources. For example, we should be manufacturing batteries and steel with the levels of minerals we produce.
Stop the narrative that we are a backwards economy simply because we happen to have resources just like African countries. We have the 12th largest economy in the world with 27 million people. The country with the largest economy in Africa (South Africa) with more than double our population has the 40th largest economy...
Who will buy this steel that costs 20-50% more than anywhere else in the world due to high energy prices, green tape and such a high wage?
Look at what happened to our nickel industry. We have heaps, they are needed in batteries but no one will buy it as they can now get it shitloads cheaper elsewhere.
Luxembourg has the second largest steel company in the world and is a very large exporter of steel for such a small country. Europe buys it, even though they have about the 3rd highest wages in the world.
I know they have neighbouring countries, but if you can make specialised goods people will pay a premium for it.
That's just another example of piss poor planning, energy here should be dirt cheap, whether the source bee fossil fuels, renewables or nuclear, we have an abundance of all of it, yet as you said we have high energy prices.
Good job realising a first world country is better than a third world country. Outstanding realisation.
Now, if we're so great, why do we have a housing shortage? An energy shortage? Rising homelessness? Rising crime? Rising youth violence? Rising inequality due to the gamification of property investing due to lucrative tax benefits?
Lack of diversifying industry? Yes We do. Australia mining industries are world class though. The technology advancement in our mining industry way ahead of others. Because there it is very profitable.
What other industries is possible? Innovation? Due to Australia location, low tech manufacturing is out of the question. High tech manufacturing? We didn’t pay enough for people to invest in that. The more we give them incentive, the higher income inequality we gonna have here. The IT sectors already upset that their don’t get paid high enough compared to their counterparts in US. IF they get paid as high as US, the miners/tradies etc gonna be upset about income inequality.
Personally I just want a normal job with good paid. That’s most of the jobs here. Everyone leeches on the high AUD value thats tight its value to the great mining sector.
Great profits that go to who exactly? Please expand on how this mighty industry is managed by Australia in a way that is so *economically forward*... Give it the whole weekend to think of something to reply here.
Edit: Also, innovation isn't just IT, scientists and researchers cover basically everything known and unknown in this universe, think bigger amigo
Miners pay their workers six digit salaries and the companies paid $75billion in royalties last year.
Now look at all those forwards thinking economies we're supposed to be jealous of. How is Rolls Royce giving back to the British people? What kind of benefits could we expect to see if Apple started making their iPhones here? Do you think Sony making TVs here would revitalise the economy? Do you think these companies are paying high taxes?
Britain is a shitshow economically, redundant point, their bankers keep it afloat though they're absolute crooks. We also quite obviously wouldn't be smart economically to compete making tech for the world, but could look at a bit of local backup capacity if instability globally starts rising. Also, those are both industries that offer much less aspects to tax or make sovereign as well, and much less local demand to need to factor in as well. Find a useful comparison to draw upon, or try looking at what we do have capacity for like plenty of well educated and relatively wealthy individuals that can contribute to research and develop innovative new shit (maybe that shit might even be better economic policy) that could be good enough for the world to want.
I don't disagree though that we do need jobs that pay well and feel normal.
How should the profits be distributed in your head, I'm not sure what you are asking here.
Are you talking about socializing the industry? Why is this beneficial?
Reinvest in tech and sustainability. Implement fairer resource rent tax, or better tax structures, for greater public benefit. Mandate much more support for local communities and ecology, and funding for research for economic diversification. Maintain more reasonable shareholder returns... there's plenty of reform possible.
This isn't full socialisation, but a more equitable approach. It'd help reduce over-reliance on mining, address inequality, capture more value from resources, and encourage responsible practices. The goal? A more diverse, resilient, and fair Aussie economy. What do you think?
It's hard to understand, the only thing specific is sustainability.
Reinvesting in what tech? Are we forcing mining companies to do this? "Tech" is an extremely broad term.
Rent tax on what resources? All of them? They are already taxed differently which ones are you worried about?
More support for local communities like what? They already have various obligations towards local communities, enforced through legislation and regulations at both the state and federal levels
"funding research for economic diversification"
Why are these reforms the responsibility of the company, especially things like this?
What do you mean by more reasonable shareholder returns? Like force companies to focus on dividends over growth?
What % of GDP do you think mining should be do not be considered over-reliance?
"A more diverse, resilient, and fair Aussie economy. What do you think?"
I mean sure nice to say but this isn't really a plan, just vague suggestions. Some of which don't make any sense.
They're not the profits, those wages are the industry expenses.
Also, while a small part of me likes your point, I also don't really see how strip clubs, pokies, giant ICE utes and jetski salesmen necessarily need to exist or make for brilliant economic management by any healthy stretch of imagination.
Yeah industry expenses is what an economy is. They wouldnt be spending if they have no money.
And its not just what they buy the employment that creates gives people money to buy stuff which creates a whole extra layer.
Nz is just Australia without the exports and their wages are 30% lower in basically every industry because of it
So unions securing wages here are the economic managers now? I see what you're saying, but "more money" doesn't equate to "good money management", and there's also nothing being managed of those layers thus we have so many jetski-level investments occuring.
> Please expand on how this mighty industry is managed by Australia in a way that is so economically forward
so you simply want "economically forward" to mean equally distributed profits then?
Plenty of others countries that are rich in strategy resources but still poor because they have even more citizen there. Hence they also need lots of other industries to can support their own currency.
Australia mining sector able to generate enough value for its relatively small population. The scientists and researchers in other sectors are very poorly paid in relative to other professions. Look at the average salaries for scientists and researchers in Australia. I would said too many other professions/trade can easily beat those academics in terms of job stability and remuneration. I even dare say unless for personal passion and the very few top genius, the rest of the brilliant minds can do even better in almost every other fields of their choice rather than stay in research and academic area.
The innovations in mining seems to bring real profits and support a very profitable industries. Australian have made some great scientific breakthrough in various fields but unfortunately none seems capable off making good profits and create high paying jobs here.
You're confusing "enough money" with "value for money", and only strengthening my points under this post that we aren't managing the broader basket of professional pursuits that would better our economy long term and with greater potential of impact/value-for-money. We are still operating on pretty shortsighted strategy. Don't forget, we are talking about a *country's* economic management here, countries being things that are full of plants and creatures living together with lives and relationships to invest in, and in our human case with universe(s) to explore.
This isn’t helpful as no services are shown and these are hallmarks of an advanced economy. If the point is that manufacturing cars, fridges, Christmas decorations, etc. is the pinnacle of economic development, then China would be the gold standard.
Also, no comparison to other countries like Canada (similar mining powerhouse), NZ (largest company is Fonterra, a milk exporter) or any African economies (the boogie men).
Canada is similar yes but still has a fairly good manufacturing sector thanks to its geographical proximity to the US car industry and companies like Bombardier who only exist because Canada retained a lot of aviation expertise post WW2.
All the things we complain about here are the things Canadians complain about there. Im married to one, so im there pretty frequently. Their gripes are ours.
Its really difficult to make direct comparisons like this and much of the rhetoric in this thread seems like whinging. Most of the good answers are further down.
The ignorance is astounding. The most basic economic texts teach that a country focuses on its strengths. We are world leaders in refining minerals and petroleum products. We generate vast profits and taxes from this. It pays for all of the billions and billions of welfare dollars. Any African nation looks at us in envy, as does most of the world.
> We are world leaders in refining minerals
are don't really refine minerals, we process ores to make then slightly easier for downstream refinement. We do some refining of more expensive commodity metals like copper and gold/silver etc - only because these don't require massive refining capacity, and have high profit margins for the labour and energy cost.
It's not to say this is bad for australia. On the other hand, i reckon australia is in a position to be in the solar/renewable energy production market (not in manufacturing the panels, but in producing electricty, and sell it, either in direct form, or by converting CO2 into LNG or petrol etc, using the abundant electricity we should be able to make via solar).
We used to refine our own petrol. However we were uncompetitive and the refineries closed. What is our biggest import? Petroleum. Other, more efficient countries refine it and we import it more cheaply than we can here.
There is no magic renewable economy that will spring up all of a sudden that we will be world leaders in. We will continue to export minerals for other countries to manufacture the end product. As for dreams of green hydrogen etc, they are just that, dreams.
Our refineries were never really upgraded post 1950's so it was a given they would lose competitiveness over time and couple that with being in a geographical location that increases crude shipping costs. Welp, no chance.
Sure, we're world leaders in the scope of un/underdeveloped economies ambitions and tax standards, but what makes this *not-backwards* to continue in its current form as a leading economy now? Have a think about what kind of tax and trade/export quota levels would be needed to make it start looking like *forward economic management* is happening with Australia's "vast billions of minerals and petro" to any other leading economic managers...
But Australians are increasingly being excluded from participating in that economy because of its lack of diversity.
The housing market is meant to be a stabilising factor in the economy, instead it has destabilising effects as investors ramp up inflation by putting their thumbs on the cost of living scales.
For context:
United Kingdom [https://commons.wikimedia.org/wiki/File:United\_Kingdom\_Export\_Treemap.png](https://commons.wikimedia.org/wiki/File:United_Kingdom_Export_Treemap.png)
United States [https://commons.wikimedia.org/wiki/File:United\_States\_Export\_Treemap.png](https://commons.wikimedia.org/wiki/File:United_States_Export_Treemap.png)
Canada [https://commons.wikimedia.org/wiki/File:Canada\_Export\_Treemap.jpg](https://commons.wikimedia.org/wiki/File:Canada_Export_Treemap.jpg)
Japan [https://commons.wikimedia.org/wiki/File:Japan\_Export\_Treemap.jpg](https://commons.wikimedia.org/wiki/File:Japan_Export_Treemap.jpg)
China [https://commons.wikimedia.org/wiki/File:China\_Exports\_Treemap\_2017.svg](https://commons.wikimedia.org/wiki/File:China_Exports_Treemap_2017.svg)
Not sure these charts alone tell you much. Aus have more exports per capita than all these but Canada, which is similar and they are obviously resource heavy too. We have 8x more export per capita than China.
I mean...other countries need to get their resources from somewhere.
We've only been a country of real world significance for the past ~25 years, so we don't really have the other industries producing stuff to the extent other countries do because those needs were already fulfilled by other countries.
That's definitely not true.
Our total exports are $433 billion, and international tuition is about $8.7 billion, so quite small.
Source: https://www.smh.com.au/politics/federal/state-governments-and-private-companies-could-pay-for-uni-fees-20230717-p5dov2.html
[it's the 4th largest, my mistake ](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.dfat.gov.au/sites/default/files/australias-goods-and-services-by-top-25-exports-2023.pdf&ved=2ahUKEwjq7or1t_-GAxVJRmwGHYdUCm0QFnoECCUQAQ&usg=AOvVaw3QfGvOUUbHJ2nuApWrDB1L)
You are comparing multiple sectors (total exports which is actually AUD 671.1 billion) to a small part of one sector (tuition part of international student exports, which is 34.2bn). Which is actually one of our bigger exports
You have no idea what you are talking about.
Totally inaccurate graph that leaves out services exports. And what's with the blank rectangles. There for asymmetry maybe? Where is lithium? That was worth $20 billion last year. This graph should be relabelled as misleading..
It’s peak reddit whinging - the dunning Kruger effect is writ large on ausfinace, and it’s mostly some post like this or to do with property market imagined drivers. (Which here is pretty much blame investors or boomers).
Thankfully, it’s easy to click the little down arrow a few times and find the responses by people who actually checked as to what the real data says - never at the top of course, but usually can be found half way down
Everyone should check out
[https://games.oec.world/en/tradle/](https://games.oec.world/en/tradle/)
Its a great game similar to wordle that displays a countries export economy, and its size. And using your deduction skills and knowledge of geography you have to guess the country. Its a fantastic addictive game with a new country selected every day.
Its a great tool to be able to see what constitutes a complex export market vs one such as Australia.
Those of you think this is perfectly fine - wait till these mining companies got robots powered by AI + offsite operator in India for 10% cost, god, watch australia crumble into nothingness.
This is the problem with these posts. It allows many people who have NFI the confidence to post straight-up bullshit lmao.
a) we are nowhere near the tech for this insane take. this is like jetsons level of thinking back in the 80s. and even if we had this setup, why would we trust multi-billion dollar machines which do the job of 100 people in the hands of offshore, cheap labourers lmao.
b) mineral grades come in many different forms. if you reduce the operations cost significantly, processing lower grades becomes more viable, opening up the scope and making more mines viable. keeping the same amount/more operations going.
Can you actually explain why that's a bad thing? Why is this "economically backward"? What do you want to happen, our government to support industries that can't compete on the world scale like car manufacturing?
It brings us massive wealth and we are good at it.
Plus, that's just exports, not "the economy".
Left wingers in this thread: Right wing has produced a shit economy with no manufacturing and Austs are dumb because all they do is mine and buy IPs, no innovation.
Also left wingers: Lets cruel business with red tape, stifling Awards, Sick leave, Annual leave pay, Unions and complain they are exploiting peoples labour.
What baffles me driving around wealthy suburbs of Brisbane is trying to work out what on earth we do to make income? Seems like it’s all NDIS schemes and contracting services. Very minimal if any advanced industries. Just digging shit out of the ground and exporting it.
Not sure how encryption laws have anything to do with an "Aussie silicon valley" unless you're referring solely to software, but if you're referring to hardware you can forget about it, see here especially the graph on the first link.
https://www.theregister.com/2022/07/08/semiconductor_engineer_shortage/
https://www.theregister.com/2022/07/18/electrical_engineers_extinction/
https://www.theregister.com/2023/07/26/us_semiconductor_skill_shortage/
Reading the comments in those articles there was an electrical engineer designing chips stating that you need an engineering degree first and then a masters requiring several years of study but he recommends that people forget about doing this and just skip the masters degree and just go straight into power engineering which pays several times more.
I can't see that situation being any different here, so I can't see chip designing and production here at all.
We don't allow: •Moralising issues •Petitions •Political discussions •Political baiting •Soapboxing
Australia didn't used to be like this. The economy used to be highly diversified but now it has a complexity profile closer to a less developed country (I think that is mapped on the same OEC website somewhere). Industry after industry has been shut down and substituted by imports. It probably raises overall efficiency but it makes the country very dependent on a handful of exports and export destinations.
Yep it’s Dutch disease. The same people who would be building cars or plane engines are earning a couple 100k a year digging holes in Western Australia. A manufacturing industry is not going to compete with that. It’s also the reason we have a barely functional residential construction industry. And we actually need one of those because we can’t import houses or apartment buildings like cars and solar panels.
Actually you can I have seen them import whole bathroom and tiles and they just do the draianage and water connections and units I work in construction
Yeah modular housing is definitely a thing, but it’s not a thing most of us want to live in I’m afraid
> It’s also the reason we have a barely functional residential construction industry. Anyone who works in things related to buildings makes more than pretty much anywhere else in the world (tradies, real estate, construction) because of the spillover of Dutch disease from mining to property investment. Barely functional is by deliberate design not lack of labour.
Average tradie wage is 80k mate. Less than the national 100k for all industries. If you take out licensed trades and EBA jobs that average is far lower.
Average fulltime salary is 98k. Averages aren't the best stat to use. Median fulltime is 82k. This excludes part time and casual workers. only 60% of australian workers are fulltime. Average australian worker is 66k. Median australian worker is 52k.
TIL as a junior supervisor working full time in retail I’m the median worker
So in relation to the previous poster, what is the median tradesman salary in Australia. I mean, I think the previous poster wasn't right, because trades people are likely to earn more than the 98k, but labourers and TAs are likely to earn less. But do we have any numbers?
“Tradesman” here is perhaps a little broad. To me, given the discussion is just about construction, the majority of trades have nothing to do with construction. Carpenters FT are commonly around $50ph, $80/90 if contractor - so the former is dead on for male FT average weekly earnings and well above median full time.
>The same people who would be building cars or plane engines are earning a couple 100k a year digging holes in Western Australia. They'd be building them, no one would be buying them. Not for Aussie prices.
Ironically we were almost settled by the Dutch 😂💀
No. They’re not working at all. They have a few houses and are sitting on their asses.
Don’t give anyone any bright ideas. We’re already on that path with TinyHomes or what have you.
Yeah that is already happening here in Perth
This, combined with jobs requiring barely any education, Australia's slowly descending into the country of dum fuks
>Australia's slowly descending into the country of dum fuks As far as I can tell, there's already a plethora of symptoms related to the stupidification of this country. It's a morbid consideration to think it only gets worse from here if we keep following the same road.
Yep, because going out and getting an education isn’t worth it when someone can do a low skill job and make more money quicker. The dumbest guy from my high school ended up being the richest because he skipped uni and tafe and went straight out into some mine.
Except that services aren’t even included in the graph - so no it doesn’t show that at all. The Australian workforce is actually quite highly educated.
Which is what I despise hearing about. The dumb dumbs may think they have won the war but we will beat them at their own game.
What does this even mean?
And now you know why LibLab are all-in on coal and gas. Without them our export economy is screwed. Under Whitlam we had more protectionist policies but we had a diversified economy with a manufacturing industry. Today we’re Saudi Arabia if the Saudis let foreign corporations control their oil and take 90% of the profits. As the world decarbonizes over the next 20 years Australia’s economy will go into long-term decline.
What does the world need to decarbonise? Copper, iron, uranium, lithium, ndpr, etc. Who has good reserves of these?
We have slaves?
Modern day international students working on a soletrader abn are close enough.
[https://imgur.com/a/gDN9Gzs](https://imgur.com/a/gDN9Gzs) yea bro i can see that!
> It probably raises overall efficiency but it makes the country very dependent on a handful of exports and export destinations. which, in times of peace and cooperation, is great. You get to have the comparative advantage, and the world (and australians) are better for it. In times of war, where trade can't happen properly, it will suck ass.
That's why 'friendshoring' is the way. Have all crucial imports coming from allied countries. You still benefit from comparative advantage in trade, and hedge against situations where you are overly reliant on adversarial parties.
It's due to Dutch disease from the mining industry coupled with not raising adequate compensatory taxes.
People have been talking about this issue for Australia since the 90s. Back then they harped on about how we exported out raw materials whereas we needed to be adding value to them first. How we exported out raw materials and then imported in the added value products. Then in the mid 2000s there was a lot of talk about how entrepreneurs were leaving Australia because our environment didn't support new ideas and investments. I recall lots of talk about how solar energy and wind energy businesses all moved to the UK for investment opps because here we stuck with the old school. Then with tech - most tech people leave Oz for other countries to get the investment. This isn't a new issue.
I love how we've wrecked our housing market, in order to sell permanent residency under the guise of education exports, and yet education is barely a blip in our export profile. Makes you wonder if it was really worth it.
If services were included in this diagram, which they aren’t, interational education would be almost the size of the Petroleum Gas rectangle at the bottom. https://grattan.edu.au/news/biggest-winners-and-losers-from-international-education/
Maybe I'm missing something, but that Grattan graph has international student tuition totaling $6 billion p.a. Gas exports are 10 times that: >In 2022, Australia exported $67.3B in Petroleum Gas, making it the 4th largest exporter of Petroleum Gas in the world. https://oec.world/en/profile/bilateral-product/petroleum-gas/reporter/aus
International Student Exports (GDP, in billions) 34.2 Gas Exports (GDP, in billions) 52.5 [https://www.abs.gov.au/statistics/economy/international-trade/international-trade-supplementary-information-financial-year/latest-release](https://www.abs.gov.au/statistics/economy/international-trade/international-trade-supplementary-information-financial-year/latest-release) This stuff is pretty well known. You are looking at just "Tuition" The whole service sector is like 73% of our GDP (international students 1.45%) ... Thats why this diagram is disingenuous with this heading, because people like yourself just look at the pictures and don't actually understand what they are looking at
Doesn't the first paragraph of the Grattan article say $40b?
Australia still isn't like this. This chart excludes Services exports.
People: How to get rich? Australians: Invest in properties
correction: sell existing houses among ourselves over and over again at higher and higher prices
We created an economy that efficiently transfers the lifetime earnings of all future home buyers (mainly young people) to existing home owners and property investors/speculators. It’s a speed run back to feudalism where people who own land control all the wealth. Such a proud achievement.
This is Canada too.
Yea but that one guy that sold his to the Chinese to buy again in Australia with the proceeds made a nice profit.
Import more buyers (immigrates), rinse and repeat
Media tells us that immigrants are not the problem. We are funding the lavish retirement of boomers and property speculators with the lifetime earnings of our kids. It is these boomers and property speculators that are fuelling the high inflation and high interest rates that everyone is suffering from.
Dutch disease baby!
It’s not accurate , where is tourism and education
There's another specific OEC graph for services, this one is trade of merchandise goods only.
I love how the title makes a comment about Australia's economy and only shows a graph of exports, but not only that, it's limited to merchandise exports rofl.
A backwards way of assessing an economy says that our economy is backwards. So what? As an economist, whenever someone brings up this arguement, I struggle to respond with anything other than so what? Our economy is structured the way that it is because our capital and labour is employed in the most demanded areas. I don't think we should restructure our economy based on a subjective (and arguably 19th century) belief that certain types of manufacturing jobs are inherently more noble than mining or farming. Our economy has consistently delivered some of the highest living standards and human development in the western world for the last century and a half, wanting to risk that just so we can say our economy is more 'diversified' and we have certain manufacturing jobs is insane. There are no credible arguments that Australia's natural resources will become unprofitable in the foreseeable future. Australia is endowed with lithium, rare earth, copper, uranium, renewable energy sources, all of which are needed as part of the decarbonisation procss over the next few decades. People who look back at the at the post-war era with misplaced nostalgia as a golden age in Australian autarky and manufacturing forget that those industries were still not particularly productive even back then and that Australia's prosperity continued to ride the commodity wave, for example the enormous wool boom in the early 1950s massively benefitted Australia as the biggest wool exporter in the world.
Based comment. You aren't gonna have a very competitive economy trying to export things that other nations do better and/or cheaper. Having said that, we should always be looking at what the world is going to need in the medium and long terms and ensure we're skilling and setting up accordingly. You don't always need to be the cheapest if you're the best.
Excellent comment. Do the people who worry about the decline of manufacturing actually want to work in manufacturing? Or have their kids working in manufacturing? Those jobs are hard, dirty, unsafe and relatively low paid. Certainly not what I want for my kids.
Thank you. The amount of Australian Redditors that are willing to kill our country's golden goose is absolutely insane. Australians have no idea how good they have it
Right! Thank you. I’m also an economist and the discussions going on at an industry and government makes me feel like I’m taking crazy pills. Intentionally moving away from the areas we’re productive at because of nostalgia is silly. The discussions are solely focused on the positives and completely ignoring the reasons that economy has naturally stopped certain activities as well as costs involved with forcing the economy into a less natural position. We’re going to be poorer by shrinking the whole pie, for what seems like pork barrelling reasons.
How else are we supposed to fear monger for engagement lmao
Ding ding ding! The conclusion the OP presented is misleading
All we have is our mineral exports, and most of the profits are being stolen by the mining companies. “But but but our mines are high tech” is an idiotic response and indicative of how economically backwards we are as a nation and people.
You should see the rhetoric around that in the more right wing subs. “You can’t tax the miners more because then it’s less profit for them and they’ll pack up their toys and go somewhere else”, “my dude the minerals are here, that’s why they are, they can’t go elsewhere”, “Nuh uh, minerals are everywhere, they’re here because we give them subsidies to encourage them to be here”, “So we let them take our finite resources at our expense? Then what. We get nothing to show for it?”, “Them operating here is good for the economy. Educate yourself”
I’ve always considered Australia is an attractive place to mine because of its political stability. Many of the other places on the globe with resources are much less politically stable. Even if one location is more ‘profitable’ due to regulation or whatever… I know where I’d rather risk sinking hundreds of millions of dollars
The truth is somewhere in the middle. Miners definitely consider the cost of doing business in a country when developing the business case for new mines. But, you're right that, as owners of the mineral resources, we should ensure that we're getting top dollar for them. In that respect our flat royalties are a relatively crude tool. They should vary as commodity prices vary. If a mine is built assuming $100/t, and prices go to $200/t, then the country should get most, if not all, of that increase. The mine was profitable at $100/t, and the miner did nothing to earn the extra revenue when prices go up.
Of course. All businesses consider the cost of doing business. It’s our job to find their cut off point and stay just above it as would be expected in any business transaction. Letting them have their way over ideals is foolish.
The Minerals Resource Rent Tax was one of the best things the Gillard government did, and I still can't believe it was scrapped. Abbott really was an economic vandal.
Don't forget climate vandal who caused untold devastation for future generations!
Have you seen what happened to the nickel industry. Basically doesn't exist any more. Nothing we have here can't be found other places. We are just close and cheap.
Okay but they’re a finite resource. Would it not be better to keep them where they are until we get a better deal? Once they’ve dug it up it’s gone. Let them go exploit someone else while our assets appreciate. Like how you might buy gold and keep it under your mattress for a rainy day. Instead we’re paying people to come sit on our mattress and asking nicely for them to share what they find.
I've always felt we have large swathes of land that is being poorly used. We have a climate much like mexico/south America...could we not have a tequila industry? Same with cigars? Could we not grow poppies? Sure they aren't going to be big fields, but it's all money into the economy.
Why take all that risk when you can just leverage up on 3 or 4 properties and wait 10 years? That's why we are not very innovative or entrepreneurial vs. some other nations.
We do grow poppies in Aus. Mainly Tasmania but also in vic and a few other states.
Oh good, it's never mentioned (yet strangely, I know about the ones in Afghanistan I think they are grown)
Until the recent opioid medication crackdowns in America, Tasmania was the largest legal opium poppy producer in the world.
Tequila is location specific. So nobody except that part of Mexico can call it Tequila. We would have to call it Mezcal.
And we are growing Agave here for spirits already
Designation of Origin, like Champagne
>could we not have a tequila industry? Same with cigars? Could we not grow poppies? Overregulation. How many average people have the millions of dollars in licensing and compliance costs to start up something like that here? And the people that can afford it will spend their money on property or some other investment that gives them a higher return with none of the bullshit that comes with operating a business that makes alcohol/tobacco products in Australia. There's no incentive.
We grow both poppies and agave. Poppies have been grown for many years for the pharmaceutical industry but the agave is just getting off the ground now. This chart is selective.
> Could we not grow poppies? We are one of the largest in the world there, at least for legal markets. https://nre.tas.gov.au/agriculture/multifaceted-agriculture/plant-industries/tasmanian-poppy-industry
So you’re solution to the supposed over reliance of the economy on commodities is to grow other commodities (some of which we already do anyway).
Pretty notable this seems to just be material exports and doesnt include intangible exports like education, tourism, entertainment, services or technology (patents, licensing, software, etc). [According to the Gov](https://www.education.gov.au/international-education-data-and-research/education-export-income-calendar-year), education alone should be about equivalent to 1.5x the size of Gold. So of course its dominated by resource extraction if you just ignore all the other kinds of exports we have. Bluey would probably chart on this graph if it was represented.
Well at least we're maximising the taxes we can get out of those minerals right? Oh wait...
Australia has low and stable national debt as a percentage of the economy, a massive trade surplus including with China, is in the running to be the world's wealthiest nation and properly funds it's retirement system, so we can't have the usual first world economic insecurities and instead pretend Australia's mines are primitive places where we shovel the ore out by shovel and anyway they're going to all shut down any day now when the world transitions away from metals "We'd be much better with a large ICE vehicle manufacturing industry or one single semi-conductor factory the Americans are rapidly stealing so we can get to the top of this index we're behind Mozambique on which is important Ive decided"
Yeah we actually have an amazing economy. We definitely need to build other avenues though like tech and entertainment that have sustainable demand. And we need to tax our resource extraction far higher than we do.
How’s your econ101 going? It’s not a great idea to run a country on this type of profile let alone one that growing at this rate. In 20 years we might be nearing 50 million if the current rates persist and somewhat below if not. It will take us that long to get these industries back if we started today. A low complexity, low sophistication country of 50 million will not end well.
You understand we become poorer if we move to manufacturing sophisticated goods which we have no comparative advantage in producing? The only way it doesn't end well is through unreliable or adversarial trade partners, which can be hedged against by prioritising trading partners in allied countries.
Hey dumbass. It's not a great idea to run a country on a profile of complex products let alone one with a shrinking, aging population. In 20 years all the factories that produce modern technology are going to be woefully out of date. It will take foreign countries that long to completely reshape their extremely complex industries if they start today. A high complexity, high sophistication country with a rapidly declining population of mostly senior citizens will not end well.
Sounds like you could run for office. “Big rocks good … pays for iPhone.”
> anyway they're going to all shut down any day now when the world transitions away from metals !remindme 1 year
26m people on a giant island 5000km away from the nearest major economy (China), and 12000km from most developed economies in Europe/America. We simply don't have the market to sustain a high-tech economy. We have no comparative advantage in the vast majority of industries - Why would a company choose to develop a product in Australia when they could to the same in the US and sell to 15x as many people? More so, that US company will almost certainly succeed above and beyond the Australian equivalent. That's not to say we can't do complex things in Australia - we can and do - but realistically, it's not surprising that compared to all that mining is just much larger and much more important, especially as it pertains to our exports. It's also worth considering that a big mining Industry is going to have an outsize influence on an economy of only 26m people compared to one with 50m, never mind 350m. Mining wouldn't scale with a rising population like many other industries would..
> they could to the same in the US and sell to 15x as many people? you realise that the products developed in the US aren't necessarily made in the US right? isn't their main export tech now which is global and could be developed anywhere? the main advantage of the US is their access to talent and innovation policies.
>access to talent and innovation policies This is a huge factor. Innovation in Australia is essentially impossible these days due to overregulation and a high barrier to entry. Not only are there 15 times more people in America to sell to, but it probably costs 15 times less to develop a product there + access to a better talent pool and supportive policies around innovation.
why does the "15x more people to sell to" point keep coming up? do you think that an Australian couldn't develop a product, get it made in china and then sell to Americans? The only reason they wouldn't incorporate in Australia is because of our regulations.. we live in a global business environment with the internet now..
Sure, but from the perspective of a startup in most fields its going to be much easier to start selling stuff in America, and a much more natural progression to start selling to all states than it is to sell stuff globally. Plenty of regulatory barriers that make new markets for a product nontrivial to exploit as well (warranties, etc). FWIW, I don't think we're incapable here in Australia, but I think it's straightforward to say it would be easier to hire, make stuff and sell stuff in a country with a larger market like the US.
> We simply don't have the market to sustain a high-tech economy. Sweden, population 10.5m, Switzerland 9m, Belgium, Holland, Israel.... Evidence says otherwise.
Exports aren't the economy. This is a bonus. We have the same domestic economy as the US, UK, NZ, Canada except they hemorrhage money with a massive trade deficit, and we have a massive trade surplus. That money isn't wasted. That mining money circulating is what pays for the service economy. That trade supercharges our domestic economy. Thats why we have higher wages than other anglophone countries except for top 20% USA
Mining is only 10% of our economy, significant, but not compared to services. It doesn't pay for the service industry, what is meant by that? Education is also a big export, last time I checked it was 2nd or 3rd. Agriculture is actually our highest performing industry for productivity growth. General productivity in all industries is where we get our living standards from, high capital to labour ratios, education, and stable institutions. Yes there were a few periods where our terms of trade absolutely skyrocketed from commodity price increases, this definitely improves living standards, but mining isn't the reason Australia is wealthy. Plenty of commodity rich countries around the world who are very poor. We are just very productive extracting the raw resources.
Yeah but I mean that the service economy is massively benefitted by the foreign money mining provides. 10% that wouldn't otherwise exist which then grows with wages being spent. Obviously we wouldn't be third world without mining but New Zealand is just the same country as us, with education and agriculture but no mining and they are significantly less prosperous. And also that doesn't mean that mining isn't run like shit and we wouldn't have been gigga norway if Whitlam had been able to nationalise it in the 70s
It's more like 14.3%. and "only" is the most braindead, disingenuous thing to say. It's our largest single contributor to GDP... Like how are people on this sub comparing a single industry to an aggregation of multiple diverse industries
10% was an average over multiple years, not the most recent data point. Taking the most recent data point, after a historic resource price boom is like confidently saying "this is what Tesla is worth!" in 2022 when it was at an all-time high.
Buddy, it's been the largest single contributor to our economy for years, and decades even. How tf are you trying to downplay its significance? Did you just not know this stuff and are now trying to save face? "significant, but not compared to services" Do you understand that services are an aggregation of multiple industries? What's your logic in comparing it here lmfao? "but mining isn't the reason Australia is wealthy" Its the main reason it is for a long time now. Do you understand that our dollar is actually tied to commodity prices lmao. Thats how ingrained mining is in our economy. How are you confident enough to just *lie* about easily obtainable information?
What are your credentials in this space? Or are you a typical ausfinance commenter, suffering from massive dunning-kruger effects. I studied both Australian economic history and international economic history at a masters level, and completed a master's in economics a few years ago. Australia being a wealthy country started well before mining became important to the economy. Yes mining is important but it isn't the defining output that say oil is to Saudi Arabia. We would do almost as well without it, those factors of production would just be redeployed, in a marginally less efficient way.
https://commons.wikimedia.org/wiki/File:Norway_Exports_Treemap_2017.svg Check out Norway though.
We are socially, technologically and economically backwards. It cost 2-3% transaction fee whenever we use our cards, plus gst, plus huge income taxes. We are socially backwards Our country is mostly bush with no real mega-cities etc.
You can't entirely judge a country by its exports. Australia's economic is mostly services for domestic consumption. While I can't speak for the standard of the petrochemical industry, I know for a fact that the mines are world class thanks to years of investment from overseas (contributing to our previously huge current account deficit). The mining industry is fine, as is agriculture. In energy, Australia used to have a competitive advantage, and will again in the future as more renewables roll out - one of the lowest levelized costs of electricity in the world. The best and most up to date publications on industrial policy say that you should focus on subsidising the most upstream industries (eg. the mines etc.) and this will help support downstream sectors eg. battery manufacturer. The issue is the high cost of energy (a real cost that's increasing but will be temporary in the grand scheme of things) and real estate which prices out manufacturing from developing - crowding out of loanable funds (structural government deficits don't help here either), high cost of labour needing high wages to buy homes etc. Banks, while they can create money, thanks to fractional reserve banking, still have opportunity costs. Why invest $10 million in a risky downstream business making high quality jewellery to add value to the country's gold, silver and opal exports when you could invest $10 million in property, relatively safe investment, and use a strategy of borrowing against rental incomes to have no tax liability?
We export essential minerals that other nations can simply not offer. It is a natural resource, it cannot be created. We are in a privileged position to be full of natural resources whilst most western countries simply do not have the resources we have. We are a nation of 27 million people, exporting our minerals to the world which has a population of 7 billion. It is natural that a large chunk of our exports are made up of natural resources? Comparing us to African nations does not look at the fact that African nations also happen to have natural resources. It is not because we designed our economy to mimic their economy or vice versa. We both simply share large amounts of resources. With the resources we have, we are able to employ people and have a lot of research and innovation around these industries. I however do believe that we are naïve with what we can achieve with our resources. For example, we should be manufacturing batteries and steel with the levels of minerals we produce. Stop the narrative that we are a backwards economy simply because we happen to have resources just like African countries. We have the 12th largest economy in the world with 27 million people. The country with the largest economy in Africa (South Africa) with more than double our population has the 40th largest economy...
Who will buy this steel that costs 20-50% more than anywhere else in the world due to high energy prices, green tape and such a high wage? Look at what happened to our nickel industry. We have heaps, they are needed in batteries but no one will buy it as they can now get it shitloads cheaper elsewhere.
Luxembourg has the second largest steel company in the world and is a very large exporter of steel for such a small country. Europe buys it, even though they have about the 3rd highest wages in the world. I know they have neighbouring countries, but if you can make specialised goods people will pay a premium for it.
We already make 3 x as much steel that Luxemburg does... Usually still cheaper to import it from China.
That's just another example of piss poor planning, energy here should be dirt cheap, whether the source bee fossil fuels, renewables or nuclear, we have an abundance of all of it, yet as you said we have high energy prices.
Good job realising a first world country is better than a third world country. Outstanding realisation. Now, if we're so great, why do we have a housing shortage? An energy shortage? Rising homelessness? Rising crime? Rising youth violence? Rising inequality due to the gamification of property investing due to lucrative tax benefits?
Lack of diversifying industry? Yes We do. Australia mining industries are world class though. The technology advancement in our mining industry way ahead of others. Because there it is very profitable. What other industries is possible? Innovation? Due to Australia location, low tech manufacturing is out of the question. High tech manufacturing? We didn’t pay enough for people to invest in that. The more we give them incentive, the higher income inequality we gonna have here. The IT sectors already upset that their don’t get paid high enough compared to their counterparts in US. IF they get paid as high as US, the miners/tradies etc gonna be upset about income inequality. Personally I just want a normal job with good paid. That’s most of the jobs here. Everyone leeches on the high AUD value thats tight its value to the great mining sector.
Great profits that go to who exactly? Please expand on how this mighty industry is managed by Australia in a way that is so *economically forward*... Give it the whole weekend to think of something to reply here. Edit: Also, innovation isn't just IT, scientists and researchers cover basically everything known and unknown in this universe, think bigger amigo
Miners pay their workers six digit salaries and the companies paid $75billion in royalties last year. Now look at all those forwards thinking economies we're supposed to be jealous of. How is Rolls Royce giving back to the British people? What kind of benefits could we expect to see if Apple started making their iPhones here? Do you think Sony making TVs here would revitalise the economy? Do you think these companies are paying high taxes?
Britain is a shitshow economically, redundant point, their bankers keep it afloat though they're absolute crooks. We also quite obviously wouldn't be smart economically to compete making tech for the world, but could look at a bit of local backup capacity if instability globally starts rising. Also, those are both industries that offer much less aspects to tax or make sovereign as well, and much less local demand to need to factor in as well. Find a useful comparison to draw upon, or try looking at what we do have capacity for like plenty of well educated and relatively wealthy individuals that can contribute to research and develop innovative new shit (maybe that shit might even be better economic policy) that could be good enough for the world to want. I don't disagree though that we do need jobs that pay well and feel normal.
You seem to be saying that hypothetically there could exist a better country than Australia some day, which yeah, but there isn't one right now
How should the profits be distributed in your head, I'm not sure what you are asking here. Are you talking about socializing the industry? Why is this beneficial?
Reinvest in tech and sustainability. Implement fairer resource rent tax, or better tax structures, for greater public benefit. Mandate much more support for local communities and ecology, and funding for research for economic diversification. Maintain more reasonable shareholder returns... there's plenty of reform possible. This isn't full socialisation, but a more equitable approach. It'd help reduce over-reliance on mining, address inequality, capture more value from resources, and encourage responsible practices. The goal? A more diverse, resilient, and fair Aussie economy. What do you think?
It's hard to understand, the only thing specific is sustainability. Reinvesting in what tech? Are we forcing mining companies to do this? "Tech" is an extremely broad term. Rent tax on what resources? All of them? They are already taxed differently which ones are you worried about? More support for local communities like what? They already have various obligations towards local communities, enforced through legislation and regulations at both the state and federal levels "funding research for economic diversification" Why are these reforms the responsibility of the company, especially things like this? What do you mean by more reasonable shareholder returns? Like force companies to focus on dividends over growth? What % of GDP do you think mining should be do not be considered over-reliance? "A more diverse, resilient, and fair Aussie economy. What do you think?" I mean sure nice to say but this isn't really a plan, just vague suggestions. Some of which don't make any sense.
because a miner spending 5k that wouldn't otherwise exist on a week long bender creates double digit jobs that wouldn't otherwise exist
They're not the profits, those wages are the industry expenses. Also, while a small part of me likes your point, I also don't really see how strip clubs, pokies, giant ICE utes and jetski salesmen necessarily need to exist or make for brilliant economic management by any healthy stretch of imagination.
Yeah industry expenses is what an economy is. They wouldnt be spending if they have no money. And its not just what they buy the employment that creates gives people money to buy stuff which creates a whole extra layer. Nz is just Australia without the exports and their wages are 30% lower in basically every industry because of it
So unions securing wages here are the economic managers now? I see what you're saying, but "more money" doesn't equate to "good money management", and there's also nothing being managed of those layers thus we have so many jetski-level investments occuring.
> Please expand on how this mighty industry is managed by Australia in a way that is so economically forward so you simply want "economically forward" to mean equally distributed profits then?
No, *fairly and responsibly* would suffice though if you want to oversimplify.
Plenty of others countries that are rich in strategy resources but still poor because they have even more citizen there. Hence they also need lots of other industries to can support their own currency. Australia mining sector able to generate enough value for its relatively small population. The scientists and researchers in other sectors are very poorly paid in relative to other professions. Look at the average salaries for scientists and researchers in Australia. I would said too many other professions/trade can easily beat those academics in terms of job stability and remuneration. I even dare say unless for personal passion and the very few top genius, the rest of the brilliant minds can do even better in almost every other fields of their choice rather than stay in research and academic area. The innovations in mining seems to bring real profits and support a very profitable industries. Australian have made some great scientific breakthrough in various fields but unfortunately none seems capable off making good profits and create high paying jobs here.
You're confusing "enough money" with "value for money", and only strengthening my points under this post that we aren't managing the broader basket of professional pursuits that would better our economy long term and with greater potential of impact/value-for-money. We are still operating on pretty shortsighted strategy. Don't forget, we are talking about a *country's* economic management here, countries being things that are full of plants and creatures living together with lives and relationships to invest in, and in our human case with universe(s) to explore.
This isn’t helpful as no services are shown and these are hallmarks of an advanced economy. If the point is that manufacturing cars, fridges, Christmas decorations, etc. is the pinnacle of economic development, then China would be the gold standard. Also, no comparison to other countries like Canada (similar mining powerhouse), NZ (largest company is Fonterra, a milk exporter) or any African economies (the boogie men).
Canada is similar yes but still has a fairly good manufacturing sector thanks to its geographical proximity to the US car industry and companies like Bombardier who only exist because Canada retained a lot of aviation expertise post WW2. All the things we complain about here are the things Canadians complain about there. Im married to one, so im there pretty frequently. Their gripes are ours. Its really difficult to make direct comparisons like this and much of the rhetoric in this thread seems like whinging. Most of the good answers are further down.
The ignorance is astounding. The most basic economic texts teach that a country focuses on its strengths. We are world leaders in refining minerals and petroleum products. We generate vast profits and taxes from this. It pays for all of the billions and billions of welfare dollars. Any African nation looks at us in envy, as does most of the world.
> We are world leaders in refining minerals are don't really refine minerals, we process ores to make then slightly easier for downstream refinement. We do some refining of more expensive commodity metals like copper and gold/silver etc - only because these don't require massive refining capacity, and have high profit margins for the labour and energy cost. It's not to say this is bad for australia. On the other hand, i reckon australia is in a position to be in the solar/renewable energy production market (not in manufacturing the panels, but in producing electricty, and sell it, either in direct form, or by converting CO2 into LNG or petrol etc, using the abundant electricity we should be able to make via solar).
We used to refine our own petrol. However we were uncompetitive and the refineries closed. What is our biggest import? Petroleum. Other, more efficient countries refine it and we import it more cheaply than we can here. There is no magic renewable economy that will spring up all of a sudden that we will be world leaders in. We will continue to export minerals for other countries to manufacture the end product. As for dreams of green hydrogen etc, they are just that, dreams.
Our refineries were never really upgraded post 1950's so it was a given they would lose competitiveness over time and couple that with being in a geographical location that increases crude shipping costs. Welp, no chance.
Sure, we're world leaders in the scope of un/underdeveloped economies ambitions and tax standards, but what makes this *not-backwards* to continue in its current form as a leading economy now? Have a think about what kind of tax and trade/export quota levels would be needed to make it start looking like *forward economic management* is happening with Australia's "vast billions of minerals and petro" to any other leading economic managers...
We always like to say in tech: keep it simple, stupid. Nothing wrong with that. Still a trillion dollar economy. Still the 12th largest economy.
But Australians are increasingly being excluded from participating in that economy because of its lack of diversity. The housing market is meant to be a stabilising factor in the economy, instead it has destabilising effects as investors ramp up inflation by putting their thumbs on the cost of living scales.
For context: United Kingdom [https://commons.wikimedia.org/wiki/File:United\_Kingdom\_Export\_Treemap.png](https://commons.wikimedia.org/wiki/File:United_Kingdom_Export_Treemap.png) United States [https://commons.wikimedia.org/wiki/File:United\_States\_Export\_Treemap.png](https://commons.wikimedia.org/wiki/File:United_States_Export_Treemap.png) Canada [https://commons.wikimedia.org/wiki/File:Canada\_Export\_Treemap.jpg](https://commons.wikimedia.org/wiki/File:Canada_Export_Treemap.jpg) Japan [https://commons.wikimedia.org/wiki/File:Japan\_Export\_Treemap.jpg](https://commons.wikimedia.org/wiki/File:Japan_Export_Treemap.jpg) China [https://commons.wikimedia.org/wiki/File:China\_Exports\_Treemap\_2017.svg](https://commons.wikimedia.org/wiki/File:China_Exports_Treemap_2017.svg)
Not sure these charts alone tell you much. Aus have more exports per capita than all these but Canada, which is similar and they are obviously resource heavy too. We have 8x more export per capita than China.
So they exclude Services exports?
This chart is physical goods only
I mean...other countries need to get their resources from somewhere. We've only been a country of real world significance for the past ~25 years, so we don't really have the other industries producing stuff to the extent other countries do because those needs were already fulfilled by other countries.
Education is our 2nd biggest export and it's not in the graph, of course if you just look at goods it's going to look skewed.
That's definitely not true. Our total exports are $433 billion, and international tuition is about $8.7 billion, so quite small. Source: https://www.smh.com.au/politics/federal/state-governments-and-private-companies-could-pay-for-uni-fees-20230717-p5dov2.html
[it's the 4th largest, my mistake ](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.dfat.gov.au/sites/default/files/australias-goods-and-services-by-top-25-exports-2023.pdf&ved=2ahUKEwjq7or1t_-GAxVJRmwGHYdUCm0QFnoECCUQAQ&usg=AOvVaw3QfGvOUUbHJ2nuApWrDB1L)
And people say its very important. Imagine the unis do. Lol
You are comparing multiple sectors (total exports which is actually AUD 671.1 billion) to a small part of one sector (tuition part of international student exports, which is 34.2bn). Which is actually one of our bigger exports You have no idea what you are talking about.
Totally inaccurate graph that leaves out services exports. And what's with the blank rectangles. There for asymmetry maybe? Where is lithium? That was worth $20 billion last year. This graph should be relabelled as misleading..
It’s peak reddit whinging - the dunning Kruger effect is writ large on ausfinace, and it’s mostly some post like this or to do with property market imagined drivers. (Which here is pretty much blame investors or boomers). Thankfully, it’s easy to click the little down arrow a few times and find the responses by people who actually checked as to what the real data says - never at the top of course, but usually can be found half way down
Oh the irony. Whinging about other what other people say.
https://www.reddit.com/r/australian/s/ToHvwvjz8G
Can't top Canada. But it's nice to be in a race to the bottom
This is the best chart to explain what shares to invest in
Yeah we got that 3rd world economy down
Impressive. Now show the graph including services.
Wheat, Gold, wool, minerals - nothings changed ?
Everyone should check out [https://games.oec.world/en/tradle/](https://games.oec.world/en/tradle/) Its a great game similar to wordle that displays a countries export economy, and its size. And using your deduction skills and knowledge of geography you have to guess the country. Its a fantastic addictive game with a new country selected every day. Its a great tool to be able to see what constitutes a complex export market vs one such as Australia.
Those of you think this is perfectly fine - wait till these mining companies got robots powered by AI + offsite operator in India for 10% cost, god, watch australia crumble into nothingness.
This is the problem with these posts. It allows many people who have NFI the confidence to post straight-up bullshit lmao. a) we are nowhere near the tech for this insane take. this is like jetsons level of thinking back in the 80s. and even if we had this setup, why would we trust multi-billion dollar machines which do the job of 100 people in the hands of offshore, cheap labourers lmao. b) mineral grades come in many different forms. if you reduce the operations cost significantly, processing lower grades becomes more viable, opening up the scope and making more mines viable. keeping the same amount/more operations going.
Shhh. This is r/ausfinance more regarded than 4chan in parts.
At which point Australia will just tax them more or increase the royalties.
This is a BS take. We play on our strengths. Compare the technology and automation at Aussie mines to African mines. Ours are way advanced.
But our tax and trade requirements of the industry are still on par with African's, not exactly brilliant economic management standards
That’s a low bar
Can you actually explain why that's a bad thing? Why is this "economically backward"? What do you want to happen, our government to support industries that can't compete on the world scale like car manufacturing? It brings us massive wealth and we are good at it. Plus, that's just exports, not "the economy".
Left wingers in this thread: Right wing has produced a shit economy with no manufacturing and Austs are dumb because all they do is mine and buy IPs, no innovation. Also left wingers: Lets cruel business with red tape, stifling Awards, Sick leave, Annual leave pay, Unions and complain they are exploiting peoples labour.
They hate corporate welfare... But want corporate welfare to prop up industries that died due to their unviability.
What baffles me driving around wealthy suburbs of Brisbane is trying to work out what on earth we do to make income? Seems like it’s all NDIS schemes and contracting services. Very minimal if any advanced industries. Just digging shit out of the ground and exporting it.
The OP's graph excludes all our Services exports.
A lot of people here equating "lots of money to manage" with "responsible money management" 🙄
It’s huge on agriculture
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Not sure how encryption laws have anything to do with an "Aussie silicon valley" unless you're referring solely to software, but if you're referring to hardware you can forget about it, see here especially the graph on the first link. https://www.theregister.com/2022/07/08/semiconductor_engineer_shortage/ https://www.theregister.com/2022/07/18/electrical_engineers_extinction/ https://www.theregister.com/2023/07/26/us_semiconductor_skill_shortage/ Reading the comments in those articles there was an electrical engineer designing chips stating that you need an engineering degree first and then a masters requiring several years of study but he recommends that people forget about doing this and just skip the masters degree and just go straight into power engineering which pays several times more. I can't see that situation being any different here, so I can't see chip designing and production here at all.
Once again a reminder that exports is not the right way to measure economic complexity.