Mining leads growth while other sectors fail

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Updated Treasury modelling is predicting that the mining sector will grow by 77 per cent by 2020, while textiles, clothing, and footwear fall 34 per cent and car manufacturing declines 39 per cent.

The modelling on the government’s carbon tax package said the mining growth will be lead by booms in iron ore (up 104 per cent), gas (up 100 per cent), and non-ferrous ore (up 92 per cent).

It said coal mining would also rise by 45 per cent and other mining by 82 per cent.

The steel industry, which will be subject to a $300 million assistance package under the carbon tax, is expected to grow by ten per cent in ten years.

Treasurer Wayne Swan said in a statement the modelling showed under a $23-a-tonne tax there would be little difference to the economy compared to a $20-a-tonne tax.

“As expected, the updated modelling shows almost no difference with the previous modelling exercise,” he said.

He said under the tax Australia’s emissions would be nearly half of what they would otherwise be by 2050, and the economy would still perform well.

“The economy continues to grow strongly under a carbon price, with real gross national income per person growing at an average rate of 1.1 per cent to 2050,” he said.

“Jobs grow strongly under a carbon price, with national employment expected to increase by 1.6 million jobs to 2020.”

The modelling showed that by 2020 the electricity sector will begin its transformation, with coal power declining by nine per cent, gas power growing by 25 per cent, and renewables growing 527 per cent.

Yesterday Swan was named finance minister of the year by Euromoney, with the magazine claiming he had “succeeded in getting most of the important decisions right”.

After the announcement shadow treasurer Joe Hockey said it was “hard to take the award seriously” because Swan had never handed down a surplus and had racked up deficits of $154 billion.

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