If you want to know why Australia has recorded a string of large trade surpluses over the past couple of years, including a record $4.8 billion surplus in February, you just have to take one look at the chart below.
From the National Australia Bank, this chart shows the value of Australia’s big three commodity exports — iron ore, coal and other mineral fuels — since the start of the decade.
Put simply, thanks to both higher prices and volumes, export values have boomed, delivering a massive windfall to government revenues as a consequence, helping to improve Australia’s budget bottom line.
Much of that is due to China, Australia’s largest trade partner, with its ravenous demand for raw materials, and more recently supply-side and environmental reforms on its industrial sectors, helping boost Australia’s export earnings.
As a consequence, income tax relief is now on the way for many Australian workers.
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