The mid-2010s mining boom saw a sharp uplift in economic mobility in Queensland and Western Australia, Treasurer of Australia, Dr Jim Chalmers, wants to see the spoils of Australia’s critical mineral wealth lifting people out of disadvantage.
“Mobility is all about how easy or hard it is for a kid from a disadvantaged background to become more prosperous themselves as an adult,” Dr Chalmers said.
Dr Chalmers said a Treasury analysis revealed strong upwards mobility in WA and Queensland early in the last decade that was partly driven by mining creating good local jobs.
The treasurer envisions the mining of minerals such as bauxite, copper and nickel, crucial for the transition to a low-carbon economy – will deliver another round of well-paid roles.
“And through all of that, there are huge opportunities to create new, high-skill jobs up and along the value chain – through processing, refining and manufacturing,” he said.
Dr Chalmers has previously identified Australia’s rich critical mineral resources as the nation’s opportunity of the century.
The Treasury analysis also revealed Australia is on par with Sweden and streaks ahead of the US when it comes to income mobility.
A child born to parents in the bottom 20 per cent of incomes in Australia is over 60 per cent more likely to reach the top 20 per cent of incomes than a child in the US.
The analysis, which drew on Australian income data from adults born between 1978‑1982 to see how that generation’s earnings compared to their parents, also foreshadowed a slowdown in income mobility between generations.
On the economic headwinds facing Australia, Dr Chalmers said he remained confident the country could avoid a recession despite International Monetary Fund and World Bank predictions of choppy waters for the global economy in 2023.
“We’ve got a lot of things going for us in Australia – low unemployment, the beginning of wages growth, good prices for what we sell the world,” he said.
ANZ economists said the Reserve Bank’s response to inflation will make or break Australia’s economic performance in 2023.
The central bank hiked interest rates eight rate times in 2022 to curb inflation.
The economists pointed to early signs of waning economic resilience, including job vacancies falling slightly and sinking building approvals.
Weakening conditions are yet to appear in inflation readings, with the monthly consumer price index re-accelerating to 7.3 per cent for November 20231.
ANZ economist, Adelaide Timbrell, said the bank wasn’t forecasting a recession, but if inflation at the end of 2022 was higher than expected it could put pressure on the Reserve Bank to lift interest rates again.
“This would increase the risk of a hard landing,” she said.
ANZ economists have downgraded their 2023 growth forecast from 1.8 per cent annually to a 1.5 per cent increase in GDP over the year.
