Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I will make a few points. The senator is correct, and I do congratulate him on being one of the few on that side who are actually aware that we did factor in a reduction in the terms of trade over the forecast period. That is because we did not make assumptions that the sorts of prices that Australia was getting for a number of its exports would be maintained at what might be called scarcity levels. We will consider these issues, as the senator knows, in the usual way in the mid-year review. It is the case, and the Treasurer has made this clear, that there is a decline in the terms of trade over the forward estimates. I would make this point, and I note that the minutes from the Reserve Bank today make a similar point: whilst prices might have come off historical highs, export volumes are still very significant and we are still seeing very significant investment in the resources sector in this country. I am not suggesting this, but I hope that the senator is not joining the 'doom and gloom' chant that that side of politics likes to engage in.

There is no doubt that you also have to look through the boom to what is beyond, and that is why the government is making investments in things like education and in skills in the university sector in a very constrained fiscal environment. Those investments are important, as is the NBN, in terms of the future productivity of the Australian economy. Obviously prosperity is something that you have to build in every period of government, and you cannot assume that the sorts of prices we were getting in 2011 will be the prices we will get to the end of the decade.