Budget whack from lower coal, iron ore exports

TREASURER Wayne Swan is bracing for a “substantial hit” to tax revenues ahead of the federal budget next month as disaster-stricken Japan cuts back on coal and iron ore imports.
Budget whack from lower coal, iron ore exports Budget whack from lower coal, iron ore exports Budget whack from lower coal, iron ore exports Budget whack from lower coal, iron ore exports Budget whack from lower coal, iron ore exports

Treasurer Wayne Swan.

Blair Price

Australia is facing about $2 billion of lost export earnings this financial year, according to recent Treasury estimates.

Damage to Japanese ports, coal-fired power stations and associated disruptions to steelmakers were cited as the main cause for the loss.

“We'll be framing the budget in really tough circumstances this year, but we're determined to bring the budget back to surplus as planned,” the Canberra Times reported Swan as saying.

While there are plans to further advance the Minerals Resource Rent Tax and carbon tax proposals this year, Prime Minister Julia Gillard warned this week of hard budget decisions to avoid “long-term pain”, indicating the government might cut back public spending.

ANZ analysts still expect coking coal and iron ore prices to remain “elevated” until at least 2013, as anticipated Japanese reconstruction efforts fuel demand.

The devastating wet season in Queensland spiked hard coking coal prices to $325-330 a tonne for the June quarter, but this week ANZ forecast the commodity to slip to $205/t by the December quarter.

The analysts are factoring in another tough wet season next year with a hard coking coal price forecast of $295/t for the June quarter of 2012.

Most read Archive

topics

loader

Most read Archive