It was a very bullish speech from Federal Treasurer Wayne Swan in New York yesterday.
Lots of talk about China, growth, the strong story that Australia has to tell the rest of the world, solid employment, low debt and deficits (compared to his hosts, especially) and more to come with an investment boom gathering pace.
Capital and the need for it was a major part of the speech, as was China and our proximity to Asia.
Mr Swan told the audience at the New York Stock Exchange that Australia needs more capital to support its biggest mining expansion in more than 150 years, while other countries grapple with unemployment, debt and sluggish growth.
"Australia is about to embark on its biggest mining investment boom since the 1850s Gold Rush," Mr Swan said in a speech in New York yesterday.
"This pushes us to pick up the pace of reform, to make Australia an even more attractive investment destination."
The Australian Bureau of Agricultural and Resource Economics estimates the current pipeline of resource projects in Australia at nearly $360 billion on sustained demand from China and India for resources from the world’s biggest exporter of iron ore and coal.
Chevron is spending $43 billion on the Gorgon LNG project, its Wheatstone project will be much larger, LNG projects are planned for Queensland, with billions to be spent on iron ore, coal, alumina, copper, gold and a host of other projects.
Mining-investment plans are up almost 50%, or five times more than levels six years ago, Mr Swan said. And the Reserve Bank has forecast that resource investment could reach 10% of GDP or more (this includes spending on LNG projects).
Mr Swan contrasted Australia’s position with that of the rest of the developed world:
"It’s an unfortunate reality that two years from the start of the crisis, many of the world’s advanced economies are still grappling with near double digit unemployment rates, an anaemic private recovery and high sovereign debt. The global recovery is patchy, it’s uneven, and it’s uncertain.
"Many countries are still yet to recoup the output lost during the crisis. And across the globe, there are still around 30 million more workers without a job than there were around three years ago," he told the audience.
Mr Swan said the Australian story is a very different one.
"Unlike the rest of the developed world, Australia avoided recession.
"In 2009 the global economy contracted for the first time since the 1930s but the Australian economy continued to grow.
"And the latest figures show our economy grew by 3.3 per cent through the year to the June quarter.
"We have an unemployment rate of 5.1 per cent – around half that seen here in the US and in Europe.
"And Australia’s net debt levels are just a small fraction of the levels seen in other advanced economies.
"Australian government net debt will peak at just 6 per cent of GDP in 2011-12. By comparison, the collective government net debt of major advanced economies is expected to hit 90 per cent of their GDP in 2015.
"And we’re on track to get the budget back to surplus in 2012-13 – years ahead of every major advanced economy.
"So how have we come through the crisis in such good shape?
"One of our great strengths was the strength of our banking system.
"Only nine of the hundred largest banking groups in the world are rated AA or above – and four of those are Australian.
"Even at the height of the crisis, no Australian bank, building society or credit union required an injection of government funds.
"We’ve got tough and effective regulators. And we didn’t suffer the financial market excesses of Europe and the US.
"But it wasn’t only the strength of our banks. The Reserve Bank of Australia aggressively cut interest rates to emergency levels and the Government immediately put in place powerful fiscal stimulus to support jobs and growth. Our response was quick enough and big enough to not just arrest the decline in confidence, production and spending, but to turn them around.
"We would not have done so well, however, without the benefits of the preceding decades of hard-fought economic reforms. Reforms that opened our economy, improved the flexibility and efficiency of markets, and deepened linkages with our region.
"So it’s a combination of all these factors that now sees Australia entering its 20th year of uninterrupted economic expansion. Today we have an economy that’s recovering strongly; low unemployment, a robust financial system, and we’re on track to get the budget back to surplus in three years."
Mr Swan didn’t ignore that fact that Australia is well placed because of geography.
"Australia is also privileged to be in a corner of the global economy that has not only weathered the global recession so strongly, but is expected to drive future growth for years to come.
"The economic re-emergence of Asia is arguably the most significant global economic transformation since the emergence of the US as a major economic power in the early 20th century.
"It is not that Asia is supplanting Europe or the US, but rather adding another engine of global economic growth.
"The US will remain a key trading and investment partner for Australia and our economic fortunes will continue t
